Blazer Company sells merchandise with a one-year warranty. In Year 1, sales consisted of 2,800 units. It is estimated that warranty repairs will average $10 per unit sold, and 30% of the repairs will be made in Year 1 and 70% in Year 2. In the income statement for Year 1, Blazer Company should show warranty expense of

a.$19,600.

b.$0.

c.$8,400.

d.$28,000.

A company provides a one-year warranty with its products. Product warranty payable would appear on the balance sheet as a

a.long-term liability.

b.disclosure in the notes only.

c.selling expense.

d.current liability.

A contingent liability that is probable and for which the dollar amount can be estimated should be

a.neither recorded nor disclosed.

b.recorded only.

c.recorded and disclosed.

d.disclosed only.