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Business, 08.11.2019 20:31 christylam1606

In 20x1, stevens corp. began a new product line of wearable technology that carries a 24-month warranty against manufacturer defects. based on industry experience, stevens expects warranty costs to be an amount equal to approximately 9% of total sales dollars. during 20x1, new sales of this technology totaled $3,000,000. the costs incurred to satisfy warranty claims in 20x1 was $95,000. required: answer the following two questions.

a. what should stevens report as the"warranty expense' balance on its 20x1 income statement?
b. what should stevens report as the warranty liability. balance on its balance sheet at 12/31/x1?

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