Reference no: EM132344429

Question

In 2017, Concord Corporation began selling a new line of products that carry a two-year warranty against defects. Based upon past experience with other products, the estimated warranty costs related to dollar sales are as follows:

First year of warranty 3%Second year of warranty 5% Sales and actual warranty expenditures for 2017 and 2018 are presented below:

                                                 2017             2018

 Sales                                       $755000         $1054000

Actual warranty expenditures          46000          72000

What is the estimated warranty liability at the end of 2018?(assume the accrual method)