2. Beginning on January 1, 20X0, Lisbon Corporation began offering a three year warranty from the date of sale on any of its products sold from that date on. The warranty offer was expected to cost Lisbon 4% of its sales. Sales made under warranty in 20X0 amounted to $ 10,000,000 and 1 5% ofthe units sold were returned. The cost to repair or replace the units cost Lisbon $72,000. What amount of warranty expense should Lisbon report on its 20X0 income statement? (a) $133,333. (b) $400,000. (c) S 72,000. (d) S328,000. 3. SFAS No. 43, Accounting for Compensated Absences, establishes the requirements for employers to accrue a liability for employees' compensation for future absences. The item that would require accrual under the provisions of this statement is: (a) Severance pay (b) Postretirement benefits. (c) Vacation pay based on past service. (d) Long term disability pay