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Question - Fridges Inc. provides a two-year warranty on all refrigerators that it manufactures. Based on expected values, Fridges has estimated that amounts related to the warranty claims for sales made in 20X4 will be $650,000 in the first year following the sale and $400,000 in the second year. During 20X4, Fridge incurred costs for parts and labour of $520,000 for actual warranty claims. Fridge follows IFRS and has a December 31 year end. What amount of warranty expense will Fridge report for the year ended December 31, 20X4?
a. $520,000
b. $1,050,000
c. $530,000
d. $650,000
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