How much will fire recognize as warranty expense

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Question - FIRE Company manufactures and sells laptops and other electronic equipment. For the year ended December 31, 2022, its sales amounted to P5,000,000. Based on past experience, FIRE accrued warranty costs during the year equal to 5% of sales. However, on January 2, 2023, upon routine inspection of its beginning inventory, FIRE discovered that certain units were missing integral parts. As a result, it revised its warranty provision to 9% of sales. The financial statements of FIRE for the year ended December 31, 2022 were authorized for issue on March 30, 2023. How much will FIRE recognize as warranty expense on its statement of comprehensive income for the year ended December 31, 2022?

Reference no: EM133163190

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