Question

Scott Company sells merchandise with a one-year warranty. Sales consisted of 25,000 units in Year 1 and 20,000 units in Year 2. It is estimated that warranty repairs will average $100 per unit sold, and 30% of repairs will be made in Year 1 and 70% in Year 2 for the Year 1 sales. Similarly, 40% of repairs will be made in Year 2 and 60% in Year 3 for Year 2 sales. In the Year 2 income statement, how much of the warranty expense shown will be due to year 2 sales? Double-click on the box below to edit your answer choices.

A.$2,000,000 B.$2,600,000 C.$1,400,000 D.$800,000

The Dunder-Mifflin Paper Company purchased a timber site for $2,000,000 on August 1. The company expects to cut trees for the next 20 years and ancticipates that a total of 550,000 tons of timber will be provided. The timber site has an estimated residual value of $100,000. During the first year, the company extracted 10,000 tons of timber, and in the second year the company extracted 20,000 tons of timber. The depletion expense for year 1 is Double-click on the box below to edit your answer choices.

A.$34,545 B.$36,364 C.72,726 D.69,080

Westmont Company's book value of its fixed assets are $800,000 at the beginning of the year, and $600,000 at the end of the year. What is the fixed asset turnover ratio for Westmont if the company had sales of $2,100,000 and operating expenses of $1,600,000 for the current year. Double-click on the box below to edit your answer choices.

A.0.2857 B.2.6250 C.3.0000 D.0.7143

Answer 1