8. Warranties. ,500 cach arid also gives each customer a 2-year Merritt Equipment Company sells computers for $1 warranty that requires the company periodic services 2017, the company sold 1,200 computers. Based on past experience, the $60 for labor per unit. (Assume sales all occur at December 31, 2017.) 200 como perform periodic services and to replace defective parts. During company has estimated the total 2-year warranty costs as $40 for parts and In 2018, Merritt incurred actual warran $24,000 for labor. ty costs relative to 2017 computer sales of $16,000 for parts and Instructions (a) R (b) The transacti sheet? to reflect the above transactions (accrual method) for 2017 and 2018. ons of part (a) create what balance under current liabilities in the 2017 balance ecord give the entries 9. For which of the following areas a provision may be recognized in the financial statement? A) Possibility of war B) Business recession C) Warranties D) Strike 10. Under IFRS, short-term obligations expected to be refinanced can be classified as noncurrent if the refinancing is completed: A) by the financial reporting date. B) by issue date of the financial statement. C) either by the financial statement date or before the date the financial statement is issued. D) after the maturity date of the obligation. Page 4