What is the balance of the warranty liability as of january

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Reference no: EM132980604

Question - A company is engaged in the retail sale of high-definition televisions (HDTVs). Each HDTV has a 24-month warranty on parts. If a repair under warranty is required, a customer is charge for the labor is made.

Management has found 40% of the HDTVs sold require some work before the warranty expires. Furthermore, the average cost of replacement parts has been P1,800 per repair. At the beginning of January, the account for the estimated liability for product warranties had a credit balance of P429,000.

During January, 168 HDTVs were returned under the warranty. The cost of the parts used in repairing the HDTVs was P262,950 and P283,260 was collected as service revenue for the labor involved. During January 2020, the company sold 675 new HDTVs.

What is the balance of the warranty liability as of January 31, 2020?

Reference no: EM132980604

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