Question

In: Accounting

Hall Company sells merchandise with a one-year warranty. In the current year, sales consisted of 4,091...

Hall Company sells merchandise with a one-year warranty. In the current year, sales consisted of 4,091 units. It is estimated that warranty repairs will average $13 per unit sold, and 30% of the repairs will be made in the current year and 70% in the next year. In the current year's income statement, Hall should show warranty expense of 

a. $15,955 

b. $37,228 

c. $0 

d. $53,183

Solutions

Expert Solution

Warranty expense to be shown

= Units sold * 13 per unit

= 4091 * 13

= 53,183

Option D is the answer

ekkarill92 answered 2 years ago
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