Unified Computing Hub (UCH) sells computers for $2,500 each and also provides a 3-year warranty, which requires the company to perform periodic services and replace defective parts. During 2023, the company sold 900 computers. Based on past experience, the company has estimated the total 3-year warranty costs per computer as $50 for parts and $90 for labor. (Assume sales all occur on December 31, 2023.) In 2024, UCH incurred actual warranty costs relative to 2023 computer sales of $15,000 for parts and $30,000 for labor. Under the expense warranty treatment (accrual method), what is the balance under current liabilities in the 2023 balance sheet? a. $126,000 b. $145,000 c. $155,000 d. $136,000
Unified Computing Hub (UCH) sells computers for $2,500 each and also provides a 3-year warranty, which requires the company to perform periodic services and replace defective parts. During 2023, the company sold 900 computers. Based on past experience, the company has estimated the total 3-year warranty costs per computer as $50 for parts and $90 for labor. (Assume sales all occur on December 31, 2023.) In 2024, UCH incurred actual warranty costs relative to 2023 computer sales of $15,000 for parts and $30,000 for labor. Under the expense warranty treatment (accrual method), what is the balance under current liabilities in the 2023 balance sheet? a. $126,000 b. $145,000 c. $155,000 d. $136,000
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Under the expense warranty treatment what is the balance under current liabilities in the 2023
Transcribed Image Text:Unified Computing Hub (UCH) sells computers for $2,500 each and also provides a 3-year warranty,
which requires the company to perform periodic services and replace defective parts. During 2023, the
company sold 900 computers. Based on past experience, the company has estimated the total 3-year
warranty costs per computer as $50 for parts and $90 for labor. (Assume sales all occur on December
31, 2023.) In 2024, UCH incurred actual warranty costs relative to 2023 computer sales of $15,000 for
parts and $30,000 for labor.
Under the expense warranty treatment (accrual method), what is the balance under current liabilities
in the 2023 balance sheet?
a. $126,000
b. $145,000
c. $155,000
d. $136,000
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