A company provides a warranty on its products that it sells to customers. The warranty liability account had $1,200 balance on April 1. The company had sales of $67,000 in April and estimated warranty repairs at 3% of sales. During the month, the company actually paid out $2,400 for warranty repairs.
Determine the April 30 balance in the estimated warranty liability account.
4. Contingent Liabilities 6. Account Classifications| Click Here to View All Chapter 9 Problems at Once | View | ||
| 1 | Current Assets | Easy | |
| 2 | Effect on the Current Ratio | Easy | |
| 3 | Liability Classification | Easy | |
| 4 | Contingent Liabilities | Moderate | |
| 5 |
Contingent Liabilities - Warranties
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Moderate | |
| 6 | Account Classifications | Hard |
| 1 | Current Assets | 9:57 | |
| 2 | Non-Current Assets | 10:25 | |
| 3 | Current Liabilities | 6:24 | |
| 4 | Non-Current Liabilites | 2:00 | |
| 5 | The Classified Balance Sheet | 4:48 | |
| 6 | Ratios: Current Ratio | 4:00 | |
| 7 | Interest Bearing Notes | 8:26 | |
| 8 | Non-interest Bearing Notes | 6:16 | |
| 9 | Contingencies | 5:58 |