Albion Company sells merchandise with a one year warranty. In 2013, sales consisted of 2,500 units. It is estimated that warranty repairs will average $20 per unit sold, and 30% of the repairs will be made in 2013 and 70% in 2014 . In the 2013 income statement, Albion should show warranty expense of:
a. $15,000
b. $35,000
c. $50,000
d. $0
e. $25,000
C
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