Liability at the end of the year

Reference no: EM13123218

Right Medical introduced a new implant that carries a five-year warranty against manufacturer's defects. Based on industry experience with similar product introductions, warranty costs are expected to approximate 1% of sales. Sales were $15 million and actual warranty expenditures were $20,000 for the first year of selling the product. What amount should Right report as a liability at the end of the year?

Reference no: EM13123218

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