Exhibit 9-4 During 2016, the Thomas Company began selling a new type of machine that carries a two-year assurance-type warranty against all defects. Based on past industry and company experience, estimated warranty costs should total $2,000 per machine sold. During 2016, sales and actual warranty expenditures were $4,000,000 (80 machines) and $44,000, respectively. Thomas uses the GAAP approach
of accruing warranty expense (and the related liability) in the year of the sale. ? Refer to Exhibit 9-4. What amount should Thomas report as its estimated warranty liability at December 31, 2016?
A) $0
B) $44,000
C) $120,000
D) $116,000
D
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Consider a two-year bond that can be purchased for $550. What is the yield to maturity on the bond if it promises a payment of $890 in two years??
A. ?27.2 percent B. ?20 percent C. ?6 percent D. ?18.1 percent
Using the following year-end information for Calvin's Clothing, calculate the current ratio and acid-test ratio for the business: Cash$53,150?Short-term investments 10,000?Accounts receivable 50,000?Inventory 190,000?Prepaid expenses 6660?Accounts payable 104,000?Other current payables 30,700?
A. 0.43 and 1.19 B. 2.30 and 0.84 C. 2.74 and 1.19 D. 1.30 and 0.84 E. 1.30 and 1.00
When adjusting entries are entered onto a work sheet, it is not necessary to record them in the general journal
Indicate whether the statement is true or false
On June 30, Caroline, Inc. finished Job 750 with total job costs of $4400 and transferred the costs to Finished Goods Inventory. On July 6, Caroline sold goods from Job 750 to a customer for $6000 cash. Which of the following is the correct entry needed to record the revenue earned? Assume the perpetual inventory system is used.
A) debit Finished Goods Inventory $4400 and credit Sales Revenue $4400 B) debit Cash $6000 and credit Sales Revenue $6000 C) debit Sales Revenue $6000 and credit Cash $6000 D) debit Cost of Goods Sold $4400 and credit Sales Revenue $4400