At the beginning of 2013, Angel Corporation began offering a two-year warranty o

Question

1. At the beginning of 2013, Angel Corporation began offering a two-year warranty on its products. The warranty program was expected to cost Angel 4% of net sales. Net sales made under warranty in 2013 were $180 million. Fifteen percent of the units sold were returned in 2013 and repaired or replaced at a cost of $5.3 million. The amount of warranty expense on Angel's 2013 income statement is:
   
   $5.3 million. $7.2 million. $10.6 million. $27.0.

1. During 2013, Deluxe Leather Goods sold 800,000 reversible belts under a new sales promotional program. Each belt carried one coupon, which entitles the customer to a $5.00 cash rebate. Deluxe estimates that 70% of the coupons will be redeemed, even though only 350,000 coupons had been processed during 2013. At December 31, 2013, Deluxe should report a liability for unredeemed coupons of:
   
   $560,000. $1,050,000. $1,225,000 $1,750,000.

1. At the beginning of 2013, Angel Corporation began offering a two-year warranty on its products. The warranty program was expected to cost Angel 4% of net sales. Net sales made under warranty in 2013 were $180 million. Fifteen percent of the units sold were returned in 2013 and repaired or replaced at a cost of $5.3 million. The amount of warranty expense on Angel's 2013 income statement is:
   
   $5.3 million. $7.2 million. $10.6 million. $27.0.

1. At the beginning of 2013, Angel Corporation began offering a two-year warranty on its products. The warranty program was expected to cost Angel 4% of net sales. Net sales made under warranty in 2013 were $180 million. Fifteen percent of the units sold were returned in 2013 and repaired or replaced at a cost of $5.3 million. The amount of warranty expense on Angel's 2013 income statement is:
   
   $5.3 million. $7.2 million. $10.6 million. $27.0.

At the beginning of 2013, Angel Corporation began offering a two-year warranty on its products. The warranty program was expected to cost Angel 4% of net sales. Net sales made under warranty in 2013 were $180 million. Fifteen percent of the units sold were returned in 2013 and repaired or replaced at a cost of $5.3 million. The amount of warranty expense on Angel's 2013 income statement is:

$5.3 million. $7.2 million. $10.6 million. $27.0. At the beginning of 2013, Angel Corporation began offering a two-year warranty on its products. The warranty program was expected to cost Angel 4% of net sales. Net sales made under warranty in 2013 were $180 million. Fifteen percent of the units sold were returned in 2013 and repaired or replaced at a cost of $5.3 million. The amount of warranty expense on Angel's 2013 income statement is:

$5.3 million. $7.2 million. $10.6 million. $27.0.

1. During 2013, Deluxe Leather Goods sold 800,000 reversible belts under a new sales promotional program. Each belt carried one coupon, which entitles the customer to a $5.00 cash rebate. Deluxe estimates that 70% of the coupons will be redeemed, even though only 350,000 coupons had been processed during 2013. At December 31, 2013, Deluxe should report a liability for unredeemed coupons of:
   
   $560,000. $1,050,000. $1,225,000 $1,750,000.

1. During 2013, Deluxe Leather Goods sold 800,000 reversible belts under a new sales promotional program. Each belt carried one coupon, which entitles the customer to a $5.00 cash rebate. Deluxe estimates that 70% of the coupons will be redeemed, even though only 350,000 coupons had been processed during 2013. At December 31, 2013, Deluxe should report a liability for unredeemed coupons of:
   
   $560,000. $1,050,000. $1,225,000 $1,750,000.

During 2013, Deluxe Leather Goods sold 800,000 reversible belts under a new sales promotional program. Each belt carried one coupon, which entitles the customer to a $5.00 cash rebate. Deluxe estimates that 70% of the coupons will be redeemed, even though only 350,000 coupons had been processed during 2013. At December 31, 2013, Deluxe should report a liability for unredeemed coupons of:

$560,000. $1,050,000. $1,225,000 $1,750,000. During 2013, Deluxe Leather Goods sold 800,000 reversible belts under a new sales promotional program. Each belt carried one coupon, which entitles the customer to a $5.00 cash rebate. Deluxe estimates that 70% of the coupons will be redeemed, even though only 350,000 coupons had been processed during 2013. At December 31, 2013, Deluxe should report a liability for unredeemed coupons of:

$560,000. $1,050,000. $1,225,000 $1,750,000. $5.3 million. $7.2 million. $10.6 million. $27.0.

Explanation / Answer

1.$7.2 million.

2.$1,050,000.

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