Use the Following Information for Questions Below
Radio Hut Inc

question 24

Multiple Choice

Use the following information for questions below
Radio Hut Inc.offers a two-year assurance warranty against failure of its products.The estimated liability is 1.5% in the year of sale and 3% in the second year.Sales and actual warranty expense for 2020 and 2021 were:
$$\begin{array} { l c c } & \text { Sales } & \text { Actual Warranty Costs Incurred During Year } \\2020 & \$ 3,500,000 & \$ 110,000 \\2021 & \$ 3,900,000 & \$ 195,000\end{array}$$
-The warranty provision on the December 31,2020 statement of financial position sheet was

• A)$47,500.
• B)$105,000.
• C)$110,000.
• D)$157,500.

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