1. Which of the following losses would only require footnote disclosure only?

a. A probable loss with an amount that can be reasonably estimated

b. A probable loss of a known amount

c. A gain considered not probable

d. A probable loss with an amount that cannot be reasonably estimated

2. How would the Amortization of a bond discount affect each of the following?

	Bonds Net Carrying Value	Bonds Interest Expense
a.	Increase	Decrease
b.	Increase	Increase
c.	Decrease	Increase
d.	Decrease	Decrease

3. Rubys & Rings Inc. offers a two-year assurance warranty against failure of its products. The estimated liability is 4% of sales in the year of sale and 6% in the second year. Sales for 2020 and 2021 were: $2,500,000 and $2,800,000, respectively. The company incurred no warranty costs in 2020 but in 2021 they spent $175,000 on repairs related to the warranties issued 2020 and 2021. The warranty expense for 2020 was

a. $80,000

b. $100,000

c. $150,000

d. $250,000