During 2017, Smith Electronics Sold 250 Microwaves Each at $950

During 2017, Smith Electronics sold 250 microwaves each at $950 per unit. Eachmicrowave has one year warranty. In Smith estimate, it will cost them $62 per unit, if a unit is brought in under warranty for repair. During 2017, Smith spent $12,500 onwarranty costs for the appliances sold in 2017. At the end of the 2017 the warranty liability and the warranty expense related to these sales would be:

A) Warranty liability: 15,500; Warranty expense: 15,500
B) Warranty liability: 12,500; Warranty expense: 12,500
C) Warranty liability: 3.000; Warranty expense: 12,500
D) Warranty liability: 3,000; Warranty expense: 15,500

Correct Answer:

Verified

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