Geiss Motorsports sold 50 motorbikes for $1,000 each. The bikes carry a 2-year warranty for repairs. Estimates indicate that repair costs will average 2% of the total selling price. What is the amount that would be recorded in the estimated warranty liability account as a result of selling the bikes? O $1,000 Ob $500 O $20 Od No liabidity should be recorded until the bikes are returned for repairs.
Geiss Motorsports sold 50 motorbikes for $1,000 each. The bikes carry a 2-year warranty for repairs. Estimates indicate that repair costs will average 2% of the total selling price. What is the amount that would be recorded in the estimated warranty liability account as a result of selling the bikes? O $1,000 Ob $500 O $20 Od No liabidity should be recorded until the bikes are returned for repairs.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:Geiss Motorsports sold 50 motorbikes for $1,000 each. The bikes carry a 2-year warranty for repairs. Estimates indicate that repair costs will average 2% of the total
selling price. What is the amount that would be recorded in the estimated warranty liability account as a result of selling the bikes?
O $1,000
Ob. $500
O $20
Od No liabidity should be recorded until the bikes are returned for repairs.
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