contestada

Talks-A-Lot, Inc. sells cell phones to customers and expects that 10% of phones sold will be returned for repair under its warranty program. The average repair cost is $75 per phone. For 2021, Talks-A-Lot has sold 690 cell phones and has repaired 14 of them as of December 31, 2021. What amount of warranty liability should be reported at December 31, 2021

Relax

Respuesta :

abiolataiwo2015

Answer:

$4,125

Explanation:

Calculation of the amount of warranty liability which should be reported at December 31, 2021

First step

Sales(Cellphone) × Percentage of sold phone ×Average repair cost

($690 x 10%) =$69

$69×$75

=$5,175

Second step

= $5,175 - (14 x $75) = $3,375

=$5,175-$1,050

=$4,125

Therefore the amount of warranty liability which should be reported at December 31, 2021 is $4,125

Otras preguntas