Reference no: EM132918781

Question - Bob the Green is a supplier of high-end lawn mower. For the limited time from July 1 to December 31, Year 7, Bob manufactures and sells 150 units of "type S" lawn mower for $2,500 each. Included in the price of $2,500 is one-year warranty. The company estimates that the average warranty cost for each unit will be $125. The company incurs $8,400 in actual warranty costs from the sale of "type S" lawn mower in Year 7 and $10,500 in Year 8. Bob follows expense approach for the original warranty. What the balance of warranty liability at December 31, Year 8.