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What should be the estimated warranty liability

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Question - Bio Company sold a product under a two-year warranty. The estimated cost of warranty repairs is 2% of net sales. During the first two years in business, the entity made the following sales and incurred the following warranty repair costs:

For 2019 Net Sales 2,500,000

Total repair costs incurred 45,000

For 2020 Net Sales 3,000,000

Total repair costs incurred 50,000

Required - What should be the estimated warranty liability as of 2019 and 2020 respectively?

Reference no: EM132567058

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