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Question - Purple Company sold a product under a two-year warranty. The estimated cost of warranty repairs is 3% of net sales. During the first two years in business, the entity made the following sales and incurred the following warranty repair costs:
2022
2023
Net sales
2,500,000
3,000,000
Total repair costs incurred
45,000
50,000
Required - What amount should be reported as warranty expense for 2023?
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