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21 September, 00:31

Blazer Company sells merchandise with a one-year warranty. In Year 1, sales consisted of 2,800 units. It is estimated that warranty repairs will average $10 per unit sold, and 30% of the repairs will be made in Year 1 and 70% in Year 2. In the income statement for Year 1, Blazer Company should show warranty expense ofa. $19,600. b. $28,000. c. $8,400. d. $0.

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  1. 21 September, 01:35
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    = $ 28,000.00

    Explanation:

    Warranty expenses are accounted for in the period in which they are incurred. This is in accordance with the accounting reporting standards.

    For Blazer company: Year 1 sales 2800 units

    Warranty per unit: $ 10 per unit

    expected warranty cost: = 2800x $10

    = $ 28,000.00
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Home » Business » Blazer Company sells merchandise with a one-year warranty. In Year 1, sales consisted of 2,800 units. It is estimated that warranty repairs will average $10 per unit sold, and 30% of the repairs will be made in Year 1 and 70% in Year 2.
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