Aqua Construction Installs Swimming Pools

question 120

Essay

Aqua Construction installs swimming pools. They calculate that warranty obligations are 5% of gross sales. For the year just ending Aqua's gross sales were $1,500,000. Due to previous quarter recognitions, the Warranty Liability account has a credit balance of $48,700. Determine the year's total warranty liability and journalize any necessary value to establish the year's liability at December 31st.

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Definitions:

Technical Title

A specific title that accurately reflects the technical qualifications, expertise, or knowledge required for a particular job or position.

Risk Of Loss

The risk that an asset might be destroyed, damaged, or lost, affecting its value.

Ordinary Course

A term used in business and law to refer to the normal conduct of business and operations.

Clear Title

A title to property or assets that is free of liens, disputes, or legal questions, ensuring unobstructed ownership.