Question :
91. A company sold $12,000 worth of trampolines with an extended : 1256975
91. A company sold $12,000 worth of trampolines with an extended warranty. It estimates that 2% of these sales will result in warranty work. The company should: A. Consider the warranty expense a remote liability since the rate is only 2%.B. Recognize warranty expense at the time the warranty work is performed.C. Recognize warranty expense and liability in the year of the sale.D. Consider the warranty expense a contingent liability.E. Recognize warranty liability when the company purchases the trampolines.
92. The deferred income tax liability: A. Represents income tax payments that are deferred until future years because of temporary differences between GAAP rules and tax accounting rules.B. Is a contingent liability.C. Can result in a deferred income tax asset.D. Is never recorded.E. Is recorded whether or not the difference between taxable income and financial accounting income is permanent or temporary.
93. A company estimates that warranty expense will be 4% of sales. The company’s sales for the current period are $185,000. The current period’s entry to record the warranty expense is:A.
Warranty Expense
7,400
Sales
7,400
B.
Warranty Expense
7,400
Estimated Warranty Liability
7,400
C.
Estimated Warranty Liability
7,400
Estimated Warranty Expense
7,400
D.
Warranty Liability
7,400
Cash
7,400
E. No entry is recorded until the items are returned for warranty repairs.
94. A company sells computers for $1,800 each. Each computer has a two-year warranty that covers replacement of defective parts. It is estimated that 2% of all computers sold will be returned under the warranty with an average cost of $150 each. During November, the company sold 30,000 computers;. 400 computers were serviced under the warranty during November at a total cost of $55,000. The balance in the Estimated Warranty Liability account at November 1 was $29,000. What is the company’s warranty expense for the month of November? A. $26,000B. $45,000C. $55,000D. $60,000E. $90,000
95. Maryland Company offers a bonus plan to its employees equal to 3% of net income. Maryland’s net income is expected to be $960,000. The amount of the employee bonus expense is estimated to be A. $27,961B. $28,800C. $29,000D. $29,691E. $30,000
96. A company sells leaf blowers for $170 each. Each unit has a three-year warranty that covers replacement of defective parts. It is estimated that 4% of all leaf blowers sold will be returned under the warranty at an average cost of $30 each. During October, the company sold 400,000 leaf blowers; 800 leaf blowers were serviced under the warranty during October at a total cost of $25,000. The balance in the Estimated Warranty Liability account on October 1 was $12,500. What is the company’s warranty expense for the month of October? A. $24,000B. $25,000C. $37,500D. $467,500E. $480,000
97. The Federal Insurance Contributions Act (FICA) requires that each employer file a: A. W-4B. Form 941C. Form 1040D. Form 1099E. Form 521B
98. The annual federal unemployment tax return is: A. Form 940B. Form 1099C. Form 104D. Form W-2E. Form W-4
99. The wage and tax statement is: A. Form 940B. Form 941C. Form 1040D. Form W-2E. Form W-4
