Mobiles Co sells goods with a one year warranty under which customers are covered for any defect that becomes apparent within a year of purchase. In calendar year 20X4, Mobiles Co sold 100,000 units.The company expects warranty claims for 5% of units sold. Half of these claims will be for a major defect, with an average claim value of $50. The other half of these claims will be for a minor defect, with an average claim value of $10. What amount should Mobiles Co include as a provision in the statement of financial position for the year ended 31 December 20X4?
A、$125,000
B、$ 25,000
C、$300,000
D、$150,000
A、$125,000
B、$ 25,000
C、$300,000
D、$150,000
【参考答案及解析】
Mobiles Co should provide on the basis of the expected cost. The expected cost would becalculated as (2.5% x 100,000 x $50) + (2.5% x 100,000 x $10) = $125,000 + $25,000 = $150,000.
Mobiles Co should provide on the basis of the expected cost. The expected cost would becalculated as (2.5% x 100,000 x $50) + (2.5% x 100,000 x $10) = $125,000 + $25,000 = $150,000.