1. A customer of RealSharp Sharpeners alleges that RealSharp's new razor sharpener had a defect that resulted in serious injury to the customer. RealSharp believes the customer has a 51% chance of winning the case, and that if the customer wins the case, there is a range of losses of between $1,000,000 and $3,000,000 in which any number is equally likely to occur. Under U.S. GAAP, RealSharp should accrue a liability in the amount of a. b. c. d $3,000,000 SO $1,000,000 $2,000,000 2. Mona Lisa Department Stores, Inc. records $200,000 in gift card sales and receives cash in year 1. Customers redeemed 10% of the gift cards to purchase merchandise in year 2. Which of the following would be included in the summary journal entry to reflect the year 2 redemption transactions? a. debit Unearned Revenue $20,000 b. credit Sales Revenue $180,000 C. credit Unearned Revenue $20,000 d. debit Sales Revenue $180,000 3. Bigly Company sells merchandise with a one-year warranty. In 2017, sales consisted of 2,500 units. It is estimated that warranty repairs will average $10 per unit sold, and 30% of the repairs will be made in 2017 and 70% in 2018. In the 2017 income statement, Bigly should show warranty expense of a. $7,500 b. $17,500 c. $25,000 d. $0 On July 1, 2019, Bartlet Corporation issues S1,200,000 of 10-year, 9% bonds dated July 1, 2019 at a price equal to 88% of face value. Bartlet uses the straight-line method of amortization. Interest is paid cach July 1 and January 1. Bartlet Corporation's fiscal year end is June 30. The interest expense recognized for the first semiannual interest payment on January 1, 2020 is: a. $61,200 b. $54,000 C. $108,000 d. $46,800 5. Under the effective interest method of amortization, the cash payment on each interest payment date will: a. increase if bonds are issued at par b. decrease if bonds are issued at a premium C. remain the same for each interest period d. increase if bonds are issued at a discount