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What is the warranty provision for kings company

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Kings Company gives warranties at the time of sale. Sales of P20,000.000 were made evenly throughout 2016. Experience indicates that 90% of the products sold require no warranty repairs; 7% would require minor repairs costing 10% of the sales price. The appropriate discount repairs/ replacement costing 85% of the sales price. The appropriate discount factors for cash flows expected to occur on June 30, 2016 is 0.935. an appropriate risk-adjustment factor to reflect the uncertainties in the cash flow estimates is an increment of 6%.

Problem 1: The warranty provision for 2016 is

Reference no: EM132888778

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