Albert Corp If the Expense Warranty Accrual Method Is Used, What Amount

question 1

Multiple Choice

Albert Corp. introduced a new machine on January 1, 2014. The machine carried a two-year warranty against defects. The estimated warranty costs related to dollar sales were 3% in the year of sale and 5% in the year after sale. Additional information follows:

$\begin{array}{l}\begin{array}{rrr}\text { Actual Warranty }\\\underline{\text { Expenditures }}&\underline{\text { Sales}}&\underline{\text { Year}}\\\$ 600 & \$ 40,000 & 2014 \\2,200 & 60,000 &2015\end{array}\end{array}$

If the expense warranty accrual method is used, what amount relating to warranty expense should be reflected on the December 31, 2015 income statement?

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Definitions:

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Marketing practices that are aware of their impact on society, the environment, and the welfare of consumers, prioritizing ethical considerations.

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