During 2013, Salton Co

question 41

Short Answer

During 2013, Salton 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 1% 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: (assume the accrual method) What amount should Salton report as a liability at December 31, 2015?
A) $0
B) $14,000
C) $22,000
D) $148,000

• A) $0
• B) $14,000
• C) $22,000
• D) $148,000

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Definitions:

Sterile Gloves

Gloves that have been treated to eliminate all forms of microbial life and are used in medical procedures to maintain a sterile environment.

Protective Apparel

Protective apparel refers to clothing and gear designed to safeguard individuals from physical, chemical, and biological hazards.

Gloves

Hand coverings made from various materials used to protect against environmental hazards, contamination, or to prevent disease transmission.

Hand-Hygiene

The practice of cleaning hands to remove dirt, germs, and other contaminants to prevent the spread of infections.