The company manufactures high-end whole-home electronic syst…
The company manufactures high-end whole-home electronic systems and provides a one-year warranty for all products sold. The company estimates that the warranty cost is $300 per unit sold and reported a liability for estimated warranty costs of $10.4 million on January 1, 2020. If the company sold 60,000 units for a total of $324 million during the year and paid warranty claims of $12,000,000 on current and prior year sales, what amount of liability for estimated warranty costs should the company report on its balance sheet on December 31, 2020?
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