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Business, 01.02.2021 23:50 leonthegreat24

Recording and Reporting Warranties Macy Furniture sells a line of products that carry a three-year warranty against defects at no extra charge. Based on industry experience, the estimated warranty costs are as follows: first year following the year of sale, 1% of sales; second year following the year of sale, 3% of sales; and third year following the year of sale, 5% of sales. Sales and actual warranty expenditures for the first three-year period were: Cash Sales Actual Warranty Expenditures 2020 $80,000 $1,000 2021 110,000 4,100 2022 120,000 9,800 a. Provide entries for the three years for (1) credit sales, (2) estimated warranty expense, and (3) actual expenditures. b. What amount should be reported as a liability on the balance sheet at the end of each year

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