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Brigham Company sells an electric timer that carries a three-month unconditional warranty against product failure. Based...

Brigham Company sells an electric timer that carries a three-month unconditional warranty against product failure. Based on a reliable statistical analysis, Brigham knows that between the sale and the end of the product warranty period, three percent of the units sold will require repair at an average cost of $35 per unit. The following data reflect Brigham's recent experience:

October November December Dec. 31 Total

Units sold : 43,000 41,000 52,000 136,000

Known product failures from sales in:

October :420 550 310 Total: 1,280

November 330 460 Total: 790

December 510 Total: 510

Calculate, and prepare a journal entry to record, the estimated liability for product warranties at December 31. Assume that warranty costs of known failures have already been reflected in the records.

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