Mariano Corporation sells 11,000 units of inventory during the first year of operations for $500 each. Mariano provides a oneminusyear warranty on parts. It is estimated that 4% of the units will be defective and that repair costs are estimated to be $50 per unit. In the year of sale, warranty contracts are honored on 100 units for a total cost of $5,000. What amount will be reported as Estimated Warranty Liability at the end of the year?

Estimated warranty liability at the end of the year is $17,000

Explanation:

Number of units sold 11,000

Ist year operation $500 each

Rate of defective 4%

Repair cost $50 per unit

Units Honored 100

Total cost is therefore $5,000

The formula for estimated warranty is given as ;

Amount of estimated warranty=[(units sold x defective rate) - honored units] x repair cost

=[(11,000 x 4%) - 100] x 50

=[(11,000 x 0.04) - 100] x 50

=[440-100] x 50

=$17,000

answer; (1) blank; decreases; ///blank(2) increases; ///blank(3)increases;

the investment was $14,174.196

explanation:

a lump sum means that the father of the example made one deposit and leave it be.

we need to know the value of a capital that generated at 4.05% per year during 28 years the sum of $48,613.24

now clearing the formula to solve for capital we got:

and we reach the answer investment = $14,174.20