West Coast Outdoor Co, sold $22,000 worth of trampolines with a one-year warranty. The company estimates that 2% of the sales will result in warranty work. West Coast Outdoor Co. should © Recognize warranty expense and warranty liability at the time of sale © Recognize warranty liability at the time of sale © Recognize warranty expense at the time of sale © Recognize warranty expense at the time warranty work is performed © Recognize warranty expense at the time warranty work is performed and warranty liability at the time of sale Esplanade Outdoor Co. estimates that warranty expense will be 5% of sales, The current period's sales were $1,740,000. The entry to record the warranty expense is O §atimated Warranty Uabiiy 00S Cash 87.000 O [Warranty Expense 37000) Sales 87000 [Estimated Warranty Liability 87,000 Cash’ 87,00 Estimated Warranty Liability oO O [warranty Expense 87,00 ° [Estimated Warranty Liability 7.000, Warranty Expense 87.000]‘On December 31, 2020, Peligrino Co, has a long term note payable of $800,000. Of that balance, ‘$100,000 will be paid within one year from the balance sheet date. How much of the note payable should Peligrino Co. report as a non-current liability when they prepare the December 31, 2020 balance sheet? © $900,000 © $1.000,000 © Nothing, Disclose in a note to the financial statements. © $800,000 CO $700,000 Provisions must be recorded If © The future event is unlikely, but the amount can be reliably estimated. © The future event is probable, but the amount cannot be estimated. © The future event is unlikely. © The future event is probable, and the amount can be reliably estimated, © Allofthese answers are correct. During 2020, Hans Electronics sold 350 microwaves each at $1,050 per unit. Each microwave has one-year warranty. Hans estimates it will cost them $82 per unit, ifa unit is brought in under warranty for repair. During 2020, Smith spent $17,500 on warranty costs for the appliances sold in 2020. At the end of the 2020 the warranty liability and the warranty expense related to these sales would be© Warranty liability: 17,500; Warranty expense: 15,200 © Warranty liability: 17,500; Warranty expense: 17,500 © Warranty liability: 1,200; Warranty expense: 28,700 © Warranty liability: 1,200; Warranty expense: 17,500 O Warranty liability: 15,500; Warranty expense: 15,500 Major Company borrowed $12,000 by signing an 8% interest-bearing 45-day note payable to replace an overdue accounts payable. To record this transaction, Major Company should prepare a journal entry that includes a O credit to Accounts Payable for $12,000. O credit to Notes Payable for $12,000. © debit to Notes Payable for $12,000. © debit to Cash for $12,000. © debit to Cash for $12,300. The receipt of $6,000 in advance ticket sales would be recorded as © debit Unearned Revenue, credit Cash. © debit Cash, credit Unearned Revenue. © debit Unearned Revenue, credit Sales. O ae © cebit Cash, creait Revenue Payable. Sales, credit Unearned Revenue.10. Hook Co. signed @ $12,000, 120-day, 5% interest-bearing note payable at the bank in exchange for cash. Which of the following journal entries should Hook Co. use to record the note? Oe 12,000] [Notes Payable 12,000} O feesn 12,000] ‘Accounts Payable ° [Notes Payable Interest Expense Interest Expense Notes Payable Uneamed revenues are © Amounts received in advance from customers for future delivery of products or services © The same as accrued revenues © Not recorded as liabilities CO Allofthese © Reduce assetsEmployee vacation benefits © are not recorded until the employee leaves. CO are estimated liabilities. © become an expense when the employee takes a vacation. CO are not required by law, O are contingent liabilities.