During 2012,Grinder Machinery company 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 2% of sales in the year of sale,4% in the year after sale,and 6% in the second year after sale.Sales and actual warranty expenditures for the first three-year period were as follows:
What amount should Grinder Machinery report as a liability at December 31,2014?
Definitions:
Values
Core beliefs or standards that guide the behavior and decision-making of an individual or organization.
Social Capital
The networks, relationships, and norms that facilitate collective action for mutual benefit within a society.
Trusting Relationships
Bonds between individuals or entities characterized by confidence, reliability, and the expectation of honesty.
Social Capital
The networks of relationships among people who live and work in a particular society, enabling that society to function effectively.
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