Question : 141. The Buy-It-For-Yourself Company had the following assets and liabilities as : 1233969

141. The Buy-It-For-Yourself Company had the following assets and liabilities as of December 31, 2006:
 

ASSETS 

Cash$25,000

Accounts receivable15,000

Inventory30,000

Equipment50,000

LIABILITIES 

Current portion of long-term debt10,000

Accounts payable2,000

Long-term debt25,000

Determine the quick ration for the end of the year (rounded to one decimal point). 
A. 5.8
B. 3.2
C. 3.3
D. 2.4

142. Elgor Company sells merchandise with a one year warranty. In 2007, sales consisted of 2,500 units. It is estimated that warranty repairs will average $10 per unit sold, and 30% of the repairs will be made in 2007 and 70% in 2008. In the 2007 income statement, Elgor should show warranty expense of 
A. $7,500
B. $17,500
C. $25,000
D. $0

143. Elgor Company sells merchandise with a one year warranty. In 2007, sales consisted of 2,500 units. It is estimated that warranty repairs will average $10 per unit sold, and 30% of the repairs will be made in 2007 and 70% in 2008. In the 2008 income statement, Elgor should show warranty expense of 
A. $7,500
B. $17,500
C. $25,000
D. $0

144. The cost of a product warranty should be included as an expense in the 
A. period the cash is collected for a product sold on account
B. future period when the cost of repairing the product is paid
C. period of the sale of the product
D. future period when the product is repaired or replaced

145. Pilgrim Company sells merchandise with a one year warranty. In 2007, sales consisted of 1,500 units. It is estimated that warranty repairs will average $10 per unit sold, and 30% of the repairs will be made in 2007 and 70% in 2008. In the 2007 income statement, Pilgrim should show warranty expense of 
A. $4,500
B. $10,500
C. $15,000
D. $0

146. During May, CircuitSound sold 500 portable CD players for $50 each. Each CD player cost CircuitSound $25 to purchase and carried a one-year warranty. If 10 percent typically need to be replaced over the warranty period, what amount should CircuitSound debit Product Warranty Expense for in June? 
A. $2,500
B. $1,250
C. $250
D. $1,000

147. During June, CircuitSound sold 800 portable CD players for $50 each. Each CD player cost CircuitSound $25 to purchase and carried a one-year warranty. If 10 percent typically need to be replaced over the warranty period, what amount should CircuitSound debit Product Warranty Expense for in June? 
A. $4,000
B. $400
C. $2,000
D. $1,000

148. Estimating and recording product warranty expense in the period of the sale best follows which of the following accounting concepts? 
A. Cost concept
B. Business entity concept
C. Matching Concept
D. Materiality concept

149. The Buy-It-For-Yourself Company had the following assets and liabilities as of December 31, 2007:
 

ASSETS 

Cash$28,000

Accounts receivable15,000

Inventory20,000

Equipment50,000

LIABILITIES 

Current portion of long-term debt10,000

Accounts payable2,000

Long-term debt25,000

Determine the quick ration for the end of the year (rounded to one decimal point). 
A. 5.3
B. 3.6
C. 3.3
D. 2.3

150. The journal entry a company uses to record the estimated accrued product warranty liability is 
A. debit Product Warranty Expense; credit Product Warranty Payable
B. debit Product Warranty Payable; credit Cash
C. debit Product Warranty Expense; credit Cash
D. debit Product Warranty Payable; credit Product Warranty Expense