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Business, 22.04.2020 19:15 gandalfhan

Fusion, Inc. introduced a new line of circuits in 2016 that carry a four-year warranty against manufacturer's defects. Based on experience with previous product introductions, warranty costs are expected to approximate 3% of sales. Sales and actual warranty expenditures for the first year of selling the product were:

Actual warrantySales Expenditures$15 million $200,000Does this situation represent a loss contingency? Why or why not? How should it be accounted for?

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