Evenflo Corporation had a balance in the Estimated Warranty Payable on January 1, 2004 of $30,000. During 2004, sales were $1,500,000 and warranty costs were estimated at 5% of sales. During the year, $90,000 was paid out to settle warranty claims. What is the ending balance as of December 31, 2004 in the Estimated Warranty Payable account?
a. $15,000 Debit Balance
b. $45,000 Debit Balance
c. $15,000 Credit Balance
d. $45,000 Credit Balance
Frequently Asked Questions
What scientific concept do you need to know in order to solve this problem?
Our tutors have indicated that to solve this problem you will need to apply the Estimated Liabilities: Warranties concept. You can view video lessons to learn Estimated Liabilities: Warranties. Or if you need more Estimated Liabilities: Warranties practice, you can also practice Estimated Liabilities: Warranties practice problems.
What is the difficulty of this problem?
Our tutors rated the difficulty ofEvenflo Corporation had a balance in the Estimated Warranty ...as medium difficulty.