What is the revenue earned from award credits for 2022?*see attacheda. P 0b. P 28,000c. P 36,000d. P 116,000 During 2020, RIS Inc. introduced a new line of machines that carry a three-year warranty againstmanufacturer's defects. Based on industry experience, warranty costs are estimated at 2% of salesin the year of sale, 3% in the year after sale, and 4% in the second year after sale. Sales and actualwarranty expenditures for the first three-year period were as followsActual Warranty ExpendituresP 6,000SalesP 400,000202020211,000,00040,0001,400,000P 2,800,000202290,000P 136,000

Given, Total Sales for 3 years = P 2,800,000 Actual Warranty Expenditure = P 136,000 Total expected…

Answered: What is the revenue earned from award…

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What is the revenue earned from award credits for 2022? *see attached a. P 0 b. P 28,000 c. P 36,000 d. P 116,000

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

Chapter22: Accounting For Changes And Errors.

Section: Chapter Questions

Problem 10E

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Question

What is the revenue earned from award credits for 2022?

*see attached

a. P 0
b. P 28,000
c. P 36,000
d. P 116,000

During 2020, RIS Inc. introduced a new line of machines that carry a three-year warranty against
manufacturer's defects. Based on industry experience, warranty costs are estimated at 2% of sales
in the year of sale, 3% in the year after sale, and 4% in the second year after sale. Sales and actual
warranty expenditures for the first three-year period were as follows
Actual Warranty Expenditures
P 6,000
Sales
P 400,000
2020
2021
1,000,000
40,000
1,400,000
P 2,800,000
2022
90,000
P 136,000

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