A company sold $12,000 worth of trampolines with an extended warranty. It estimates that 2% of these sales will result in warranty work. The company should:
A: Consider the warranty expense a remote liability since the rate is only 2%.
B: Recognize warranty expense at the time the warranty work is performed.
C: Recognize warranty expense and liability in the year of the sale.
D: Consider the warranty expense a contingent liability.
E: Recognize warranty liability when the company purchases the trampolines.
A: Consider the warranty expense a remote liability since the rate is only 2%.
B: Recognize warranty expense at the time the warranty work is performed.
C: Recognize warranty expense and liability in the year of the sale.
D: Consider the warranty expense a contingent liability.
E: Recognize warranty liability when the company purchases the trampolines.
举一反三
- The estimated liability may include____. A: pension plans B: holiday benefits C: onus and welfare D: warranty liabilities
- warranty
- This warranty does not become void under any circumstance during the warranty period.
- Product Warranty:Please contact the seller directly for warranty information for this product. You may also be able to find warranty information on the manufacturer’s website.
- warranty card ________