What is the belence under current liabilities in the 2024 balance sheet?? University Computers Unlimited (UCU) sells computers for$2,000 each and also gives each customer a 2-year warrantythat requires the company to perform periodic services andreplace defective parts. During 2004, the company sold 700computers. Based on past experience, the company hasestimated the total 2-year warranty costs per computer as $40for parts and $80 for labor. (Assume sales all occur atDecember 31, 2004.) In 2005, UCU incurred actual warrantycosts relative to 2004 computer sales of $10,000 for parts and$24,000 for labor.Under the expense warranty treatment, (accrual method) whatis the balance under current liabilities in the 2004 balancesheet?a. $84,000.b. $24,000.c. $34,000.d. none of the above.

Step 1: Define Current LiabilityCurrent liabilities are the obligation a company has to repay in…

Answered: University Computers Unlimited (UCU)…

Intermediate Accounting: Reporting And Analysis

3rd Edition

ISBN:9781337788281

Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Chapter17: Advanced Issues In Revenue Recognition

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