Tanner Toys had sales of $2,500,000 during 2012. In 2011, 5% of sales were returned for a refund,…

Tanner Toys had sales of $2,500,000 during 2012. In 2011, 5% of sales were returned for a refund, but Tanner believes that recent product changes will reduce warranty expense to about 3% of 2012 sales. Required a. What amount is Tanner expecting to refund customers for purchases made in 2012? b. Should this amount be reported as a liability on the financial statements? Why or why not? c. Is Tanner using a reasonable means to estimate warranty expense? View Solution:
Tanner Toys had sales of 2 500 000 during 2012 In 2011

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