When he read chicken soup from the soul, joe farmer was struck by how many of the stories mentioned the scent of the islands. so farmer created bottles filled with hawaiian air and some scented essence beads. when customers shake the bottles up and open the lids, they're transported back to paradise. while many marketing experts did not think that consumers would buy bottles of air, farmer has earned more than half a million dollars of sale during his first year of operation. farmer was an example of a entrepreneur.

Analyzing and computing accrued warranty liability and expense waymire company sells a motor that carries a 60-day unconditional warranty against product failure. from prior years' experience, waymire estimates that 2% of units sold each period will require repair at an average cost of $100 per unit. during the current period, waymire sold 69,000 units and repaired 1,000 units. (a) how much warranty expense must waymire report in its current period income statement? (b) what warranty liability related to current period sales will waymire report on its current period-end balance sheet? (hint: remember that some units were repaired in the current period.) (c) what analysis issues must we consider with respect to reported warranty liabilities?