Multiple Choice
Kim Company sells 2,000 units of its product for $500 each in 2014. The selling price includes a one-year warranty on parts. It is expected that 3% of the units will be defective and that repair costs will average $100 per unit. In 2014, warranty contracts are honoured on 40 units for a total cost of $4,000.
-What amount will be reported on Kim Company's balance sheet as Estimated Warranty Liability on December 31, 2014?
A) $4,000
B) $6,000
C) $2,000
D) cannot be determined
Correct Answer:
Verified
Correct Answer:
Verified
Q45: Shediac Bay Marina had a customer loyalty
Q46: Under ASPE, a contingent liability is defined
Q47: Under IFRS, the term used for an
Q48: At its December 31, 2014 year end,
Q49: The current portion of long-term debt should<br>A)
Q51: Under ASPE, a contingent liability must be
Q52: Collateral is usually required by a bank
Q53: An operating line of credit<br>A) is a
Q54: On April 1, Hoadley Company borrows $90,000
Q55: Under IFRS, a liability is recorded if