(Answered) Fox co sold 1200000 lighters in 20x9 and estimates that

Accounting

Fox Co. sold 1,200,000 lighters in 20x9, and estimates that 18,000 of them will be defective, but only 75% will be returned. During 20x9, 12,000 lighters were replaced under the warranty, and Fox's cost to replace a returned lighter is $4.50. The balance in Fox's warranty liability at December 31, 20x8 was $5,500. What is the warranty liability on Fox's on December 31, Year 20x9 balance sheet?

a. $66,250

b. $12,250
c. $60,750
d. $6,750

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