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Western Company estimates warranty expense as 5% of sales. On January 1, 2016 warranties payable was...

Western Company estimates warranty expense as 5% of sales. On January 1, 2016 warranties payable was $20,000, and the December 31 liability for the warranty was $22,000. During the year Western recorded sales of $300,000.

The amount paid by Western during the year to meet its warranty obligations was:

A.

$30,000
B.

$12,000
C.

$15,000
D.

$13,000
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Answer #1
Warranty liability
paid 13000 opening 20,000
expense 15,000 (300,000*5%)
ending 22,000
option D
$13,000
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