Cornerstone Exercise 8-32 (Algorithmic) Warranties In 2019, Waldo Balloons sold 100 hot air balloons at $3,400 each. The balloons carry a 5-year warranty for defects. Waldo estimates that repair costs will average 4% of the total selling price. The estimated warranty liability at the beginning of the year was $42,000. Claims of $11,000 were actually incurred during the year to honor their warranties. Required: What was the balance in the warranty liability account at the end of the year?

Cornerstone Exercise 8-32 (Algorithmic) Warranties In 2019, Waldo Balloons sold 100 hot air balloons at $3,400 each. The balloons carry a 5-year warranty for defects. Waldo estimates that repair costs will average 4% of the total selling price. The estimated warranty liability at the beginning of the year was $42,000. Claims of $11,000 were actually incurred during the year to honor their warranties. Required: What was the balance in the warranty liability account at the end of the year?

Cornerstones of Financial Accounting

4th Edition

ISBN:9781337690881

Author:Jay Rich, Jeff Jones

Publisher:Jay Rich, Jeff Jones

Chapter8: Current And Contingent Liabilities

Section: Chapter Questions

Problem 57BE

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