A company switched from the cash basis to the accrual basis for recognizing warranty expense. The unrecorded liability for warranties was $1.6 million at the beginning of the year. Its tax rate is 35%. The company booked a year-end warranty liability of $3 million. As a result of this change, the firm would:
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Home » Business » A company switched from the cash basis to the accrual basis for recognizing warranty expense. The unrecorded liability for warranties was $1.6 million at the beginning of the year. Its tax rate is 35%.