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Sandhill Company offers a five-year warranty on its products. Sandhill previously estimated warranty costs to...

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Accounting

Sandhill Company offers a five-year warranty on its products. Sandhill previously estimated warranty costs to be 3% of sales but in 2025 revised this estimate to 1% due to process and quality control improvements. Sandhill reported warranty costs of $81300 on $2710000 in 2023 and $96300 on $3210000 in 2024. Sales revenue for 2025 was $5420000. What is the adjustment to Retained Earnings in 2025 (ignore income tax considerations)? O $54200 O $120500 O $66300 O $0
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Sandhill Company offers a five-year warranty on its products. Sandhill previously estimated warranty costs to be 3% of sales but in 2025 revised this estimate to 1% due to process and quality control improvements. Sandhill reported warranty costs of $81300 on $2710000 in 2023 and $96300 on $3210000 in 2024 . Sales revenue for 2025 was $5420000. What is the adjustment to Retained Earnings in 2025 (ignore income tax considerations)? $54200 $120500 $66300 $0

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