This is Lemon Company's first year of business and it sells smart phones for $400 that cost $200. They come with a lifetime warranty and average repair cost is $70. Lemon has made $8,900,000 in sales this year and 12,250 units have been returned. Lemon estimates that 3% of units will fail. The year-end balance sheet should show a liability for warranty of: Multiple Choice $500,000 $700,000 $800,000 Some other amount $600,000
This is Lemon Company's first year of business and it sells smart phones for $400 that cost $200. They come with a lifetime warranty and average repair cost is $70. Lemon has made $8,900,000 in sales this year and 12,250 units have been returned. Lemon estimates that 3% of units will fail. The year-end balance sheet should show a liability for warranty of: Multiple Choice $500,000 $700,000 $800,000 Some other amount $600,000
Chapter12: Current Liabilities
Section: Chapter Questions
Problem 9MC: Blake Department Store sells television sets with one-year warranties that cover repair and...
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![This is Lemon Company's first year of business and it sells smart phones for $400 that cost $200.
They come with a lifetime warranty and average repair cost is $70. Lemon has made $8,900,000 in
sales this year and 12,250 units have been returned. Lemon estimates that 3% of units will fail. The
year-end balance sheet should show a liability for warranty of:
Multiple Choice
$500,000
$700,000
$800,000
Some other amount
$600,000](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F3107cf6e-50c7-4b9f-a51b-afa93ffa1309%2Fee8da8b9-be61-4a6a-a278-9673f5ae33ef%2F3je5ew4_processed.jpeg&w=3840&q=75)
Transcribed Image Text:This is Lemon Company's first year of business and it sells smart phones for $400 that cost $200.
They come with a lifetime warranty and average repair cost is $70. Lemon has made $8,900,000 in
sales this year and 12,250 units have been returned. Lemon estimates that 3% of units will fail. The
year-end balance sheet should show a liability for warranty of:
Multiple Choice
$500,000
$700,000
$800,000
Some other amount
$600,000
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