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ivann1987 [24]
3 years ago
12

Benitez Co. had sales of $800,000 in 2016. The company expects to incur warranty expenses amounting to 3% of sales. There were $

13,000 of warranty obligations paid in cash during 2016. Based on this information:
A. Warranty claims would decrease net earnings by $4,000 in 2016.

B. Cash would increase by $17,000 as a result of the accounting events associated with warranties in 2016.

C. The warranties payable account would increase by $11,000 in 2016.

D. Choose either A, B, or C
Business
1 answer:
snow_lady [41]3 years ago
7 0

Answer:

<em>C.-</em> the warrant liability will increase by 11,000 during the year

Explanation:

800,000 x 3% = 24,000 warrant liability / warrant expense for the year

                          (13,000) warrant claimed

increase of          11,000  in the warant laibility balance

From a beginning balance prior to 2016 as a result of 2016 warranty-related transactions the warrant liaiblity will increase by 11,000

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Answer:

A sunk cost is the correct answer to this question.

Explanation:

Sunk cost:- Sunk costs are those expenses that have been accumulated in the past and are thus in some way unrelated to judgment-making.

In the question referred to above, the company has already made $14 to produce. This cost will be inconsequential even if the company makes the units as it is or procedures them further.

As a result, $14 is a sunk expense.

Other options are incorrect because they are not related to the given scenario.

5 0
3 years ago
Mister Plow has contracted to perform snow removal services for the city of Springfield. Record snowfall has more than doubled t
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Answer:

Fixed price contract

Explanation:

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7 0
3 years ago
What are the remains after the costs of running a business have been paidA. stockB. taxesC. profits
Vlad [161]
The answer is C. Profits.
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3 years ago
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6 0
3 years ago
A mortgage broker advertises a 30-year fixed-rate loan at a 2.00% rate. After the borrower arrives at the office and begins an a
Contact [7]

Answer:

Truth in Lending Act (TILA)

Explanation:

Mortgage brokering can be defined as a process which typically involves a mortgage broker acting as an intermediary between a financial institution (mortgage bank) offering loans and an individual that seeks to collect a loan.

This ultimately implies that, a mortgage broker acts as an intermediary (middleman) by connecting a creditor (lender) to those seeking to get a loan (borrower).

The Truth in Lending Act (TILA) also known as Consumer Credit Protection Act (CCPA) is a federal law of the United States of America that was enacted by the 89th US Congress and signed into law by President Lyndon B. Johnson on the 29th of May, 1968.

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In this scenario, a mortgage broker advertised a 30-year fixed-rate loan with an interest rate of 2.00%.

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6 0
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