Solution-What amount should be recognized as a warranty

What amount should be recognized as a warranty provision

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Reference no: EM132650653

Problem 1: CLI Company sells electrical goods covered by a one-year warranty for any defects. Of the sales of $70,000 for the year, the entity estimated that 3% will have major defect, 5% will have minor defect and 92% will have no defect. The cost of repairs would be $5,000 if all the products sold had major defect and $3,000 if all had minor defect. What amount should be recognized as a warranty provision?

Reference no: EM132650653

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What amount should be recognized as a warranty provision

Reference no: EM132650653

Reference no: EM132650653

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