Multiple Choice
In 2015, Boone, Inc.sold 1,000 carpets for $50 each.The carpets carry a 2-year warranty for repairs.Boone estimates that repair costs will average 2% of the total selling price.What is the amount that would be recorded in the warranty liability account as a result of selling the carpets during 2015?
A) $1,000
B) $ 500
C) $ 20
D) No liability should be recorded until the carpets are returned for repairs.
Correct Answer:
Verified
Correct Answer:
Verified
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