D. Scott Corporation provides a two-year warranty with the sale of its product. Scott estimates that warranty costs will equal 4% of the selling price the first year after sale and 6% of the selling price the second year after the sale. The following data are available:
| 2013 Don't use plagiarized sources. Get Your Custom Essay on the balance of the warranty liability at december 31 2014 should be 611047 Get an essay WRITTEN FOR YOU, Plagiarism free, and by an EXPERT! Just from $10/Page | 2014 | |
| Sales | $400,000 | $500,000 |
| Actual warranty expenditures | 10,000 | 38,000 |
The balance of the warranty liability at December 31, 2014 should be:
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