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Hello sir,
i am just going through the kaplan study text and i just need clarification on warranty costs this is what was included in the trial bal
Warranty provision 90,000
The year end provision for warranty claims has been estimated at
$75,000. Warranty costs are charged to administrative expenses.
Administration ((20% × 30) + 170 – 15) this is the calculation.
my question is why are they subtracting 15kisnt provision an exp ? by subtracting it they are treating as an income ?thanks in advance
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