15. A new product introduced by COCONUT Enterprise carries a two-year warranty against defects. The estimated warranty costs related to dollar sales are as follows: What amount should COCONUT report as its estimated liability as of December 31, 2021? a. ₱ 740,000 b. ₱ 40,000 c. ₱ 240,000 d. ₱ 540,000

15. A new product introduced by COCONUT Enterprise carries a two-year warranty against defects. The estimated warranty costs related to dollar sales are as follows: What amount should COCONUT report as its estimated liability as of December 31, 2021? a. ₱ 740,000 b. ₱ 40,000 c. ₱ 240,000 d. ₱ 540,000

Intermediate Accounting: Reporting And Analysis

3rd Edition

ISBN:9781337788281

Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Chapter14: Financing Liabilities: Bonds And Long-term Notes Payable

Section: Chapter Questions

Problem 8RE

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In 2020, KD Corporation began selling a new line of products that carry a two-year warranty against defects.Based upon past experience with other products, the estimated warranty costs related to peso sales are as follows:First year of warranty 2%Second year of warranty 5%Sales and actual warranty expenditures for 2020 and 2021 are presented below: 2020 2021Sales P900,000 P1,200,000Actual warranty expenditures 30,000 60,000What is the estimated warranty liability at the end of 2021?a. P87,000 b. P24,000 c. P57,000 d. P147,000
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