In 2017, Concord Corporation began selling a new line of products
that carry a two-year warranty against defects. Based upon past experience with other products, the estimated warranty costs related to dollar sales are as follows:
First year of warranty 3%Second year of warranty 5%
Sales and actual warranty expenditures for 2017 and 2018 are presented below:
2017 2018Sales $755000 $1054000Actual warranty expenditures 46000 72000
What is the estimated warranty liability at the end of 2018?(assume the accrual method)
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