1. A company has a selling price of $2,200 each for its printers. Each printer h
ID: 2430227 • Letter: 1
Question
1. A company has a selling price of $2,200 each for its printers. Each printer has a 2 year warranty that covers replacement of defective parts. It is estimated that 2% of all printers sold will be returned under the warranty at an average cost of $158 each. During November, the company sold 38,000 printers, and 480 printers were serviced under the warranty at a total cost of $63,000. The balance in the Estimated Warranty Liability account at November 1 was $33,000. What is the company's warranty expense for the month of November? A. 60,040 B. 75,840 C. 120,080 D. 30,000 E. 63,000
2. A company issues 7% bonds with a par value of $60,000 at par on January 1. The market rate on the date of issuance was 6%. The bonds pay interest semiannually on January 1 and July 1. The cash paid on July 1 to the bond holder(s) is:
A. 4200 B. 3600 C.2100 D. 1800 E. 0
Explanation / Answer
Explanation 158*38,000 *.02 Option C 120080 Option C 2100 bond interest expense 2100 Cash 2100 60000*6%*7/12
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