Mobiles Co sells goods with a one year warranty under which customers are covered for any defect that becomes apparent
within a year of purchase. In calendar year 20X4, Mobiles Co sold 100,000 units.The company expects warranty claims for
5% of units sold. Half of these claims will be for a major defect, with an average claim value of $50. The other half of these
claims will be for a minor defect, with an average claim value of $10.
What amount should Mobiles Co include as a provision in the statement of financial position for the year ended 31 December 20X4?