Ready to test your Knowledge?
Try out our new practice tests completely free!
exam preparation banner icon

Exhibit 9-4 During 2016, the Thomas Company Began Selling a New Type

Question 74
Multiple Choice
arrowQuestion 74arrow
Multiple Choice

Exhibit 9-4
During 2016, the Thomas Company began selling a new type of machine that carries a two-year assurance-type warranty against all defects. Based on past industry and company experience, estimated warranty costs should total
$2,000 per machine sold. During 2016, sales and actual warranty expenditures were $4,000,000 80 machines) and
$44,000, respectively. Thomas uses the GAAP approach of accruing warranty expense and the related liability) in the year of the sale.
-Refer to Exhibit 9-4. What amount should Thomas report as its estimated warranty liability at December 31, 2016?

A) $0
B) $44,000
C) $120,000
D) $116,000

Choose question tag
close menu

10+ million students use Quizplus to study and prepare for their homework, quizzes and exams through 20m+ questions in 300k quizzes.


Explore our library and get Accounting Homework Help with various study sets and a huge amount of quizzes and questions

Get Free Access Now!
Textbook Solutions
Textbook Solutions

Find all the solutions to your textbooks, reveal answers you would’t find elsewhere

Find Solutions
Search By Image
Search By Image

Scan any paper and upload it to find exam solutions and many more


Studying is made a lot easier and more fun with our online flashcards

Find Flashcards