1. Panther Company had a quality assurance liability of $350,000 at the beginning of 2021 and $390,000 at the end of 2021. Warranty expense is based on 4% of sales, which were $50 million for the year. What amount of warranty costs were paid during 2021? a. $1,960,000 b. $2,000,000 c. $0 d. $2,040,000 2. (CPA adapted) Q Company prepares its financial statements in accordance with US GAAP. The company is a defendant in a lawsuit that could result in a large payout to the plaintiff. Q's attorney believes it is more likely than not that will lose the lawsuit and estimates that the loss will be somewhere between $5,000,000 and $10,000,000. However, it is possible that the loss could be as high as $20,000,000. None of the estimates is better than any of the others. should report a contingent loss of_ on its balance sheet related to this lawsuit. a. $0 b. $5,000,000 c. $7,500,000 d. $20,000,000 3. Under IFRS, a liability that is refinanced after the balance sheet date but before the financial statements are issued would typically not be classified as a current liability. a. True b. False 4. Uganda Corporation ships its product in special containers, for which Uganda collects refundable cash deposits from customers. When Uganda receives the cash, the accounting records reflect a cash increase and an increase in a. revenue b. current liabilities c. prepaid expenses d. deferred revenue 5. If a company reports substantial growth in deferred revenue during the current period, then in a future period readers of the financial statements are likely to see a. a large increase in accounts receivable because customers will owe the full amount upon delivery of the goods b. a large decrease in revenue because deferred revenue in the current period implies that sales in future periods will be lower c. a large increase in revenue because the deferred revenue will be converted to revenue upon delivery of the goods d. a large increase in deferred expenses because of the matching principle