Create an account to track your scores
and create your own practice tests:
Test: CPA Financial Accounting and Reporting (FAR)
1. | The Truman Company sells 12,500 of microwaves during Year 5. All sales are covered by a warranty through the end of Year 6. Based on past experience, the company expects 4% of microwaves sold to break during Year 6 and expects it will cost $30 to fix each microwave. However, during Year 6, 540 microwaves actually break and they each cost $28 to fix. The company is now preparing comparative financial statements for Years 5 and 6. What amount of warranty expense should be recognized? |
$15,000 in Year 5 and $1,120 in Year 6
$0 in Year 5 and $15,120 in Year 6
$14,500 in Year 5 and $620 in Year 5
$15,120 in Year 5 and $0 in Year 6
Chandni
Certified Tutor
Certified Tutor
Miami University-Middletown, Bachelor of Science, Biology, General. Wright State University-Main Campus, Master of Science, A...
Popular Subjects
SSAT Tutors in Dallas Fort Worth, Math Tutors in Atlanta, GRE Tutors in San Francisco-Bay Area, SAT Tutors in Boston, Algebra Tutors in Los Angeles, English Tutors in Philadelphia, Reading Tutors in Denver, LSAT Tutors in Philadelphia, GRE Tutors in Dallas Fort Worth, Statistics Tutors in Miami
Popular Courses & Classes
SAT Courses & Classes in Phoenix, MCAT Courses & Classes in San Francisco-Bay Area, ACT Courses & Classes in Washington DC, GRE Courses & Classes in Houston, MCAT Courses & Classes in Boston, ISEE Courses & Classes in Houston, LSAT Courses & Classes in Atlanta, GMAT Courses & Classes in San Francisco-Bay Area, MCAT Courses & Classes in Atlanta, LSAT Courses & Classes in Seattle
