Pacific Company Estimates Warranty Expense as 10% of Sales

question 88

Essay

Pacific Company estimates warranty expense as 10% of sales. On January 1, the warranty liability was $10,000. During the year, Pacific paid $8,000 to meet its warranty obligations and recorded sales of $300,000. Calculate the warranty liability on December 31.

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Definitions:

Communication To Build Relationships

The use of verbal, non-verbal, and written interaction to establish and maintain positive connections with others.

Use Indirect Requests

The practice of conveying desires or demands in a less explicit and more subtle manner, often to be polite or to avoid conflict.

Information Load

The volume of information available to a person at any given time, which can affect decision-making and cognitive processes.

E-Mail Software

E-mail software is a computer application used for sending, receiving, storing, and managing electronic mail messages.