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Business, 26.03.2020 23:03 nothingworksoutforme

During 2014, Stabler Co. 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 10% of sales. Sales and actual warranty expenditures for the first three-year period were as follows:
Sales Actual Warranty Expenditures
2009 $ 600,000 $ 9,000
2010 1,500,000 45,000
2011 2,100,000 135,000
$4,200,000 $189,000
What amount should Vanpelt report as a liability at December 31, 2016?
a. $0
b. $15,000
c. $204,000
d. $315,000

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During 2014, Stabler Co. introduced a new line of machines that carry a three-year warranty against...
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