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Pronghorn Ltd. manufactures a line of amplifiers that carry a three-year warranty...

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Accounting

Pronghorn Ltd. manufactures a line of amplifiers that carry a three-year warranty against defects. Based on experience, the estimated
warranty costs related to dollar sales are as follows: first year after sale -3% of sales; second year after sale -5% of sales; and third
year after sale -6% of sales. Sales and actual warranty expenditures for the first three years of business were:
(a) Calculate the amount that Pronghorn should report as warranty expense on its 2023 income statement and as a warranty liability
on its December 31,2023 SFP using the assurance-type warranty (expense-based approach). Assume that all sales are made evenly
throughout each year and that warranty expenditures are also evenly spaced according to the rates above.
Warranty expense $
Warranty liability $
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