Computing accrued warranty liability and expense.
I need help with the following questions.
Canton Company sells a motor that carries a 60-day unconditional warranty against product failure. From prior years’ experience, Canton estimates that 3% of units sold each period will require repair at an average cost of $160 per unit. During the current period, Canton sold 100,000 units and repaired 2,400 of those units.
A). How much warranty expense must Canton report units current period income statement?
C). What analysis issues must we consider with respect to reported warranty liabilities? Get Accounting homework help today
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