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Consider the following independent scenarios: Requirement currently deductible.) Scenarios a. Cairo Corporation sells products with a one-year warranty. Cairo estimates that the warranty costs on
Consider the following independent scenarios: Requirement currently deductible.) Scenarios a. Cairo Corporation sells products with a one-year warranty. Cairo estimates that the warranty costs on products sold during this year will amount to $88,000. Cairo performs $41,000 of warranty work on products sold last year and $27,000 of warranty work on products sold this year. b. Helena Corporation agrees to pay $12,000 this year and $12,000 next year to a software developer. The developer completes all work on the software and delivers the product to Helena this year. c. Caesar Corporation pays $4,000 to a supplier to guarantee delivery of raw materials. The $4,000 is refundable if Caesar decides not to acquire the materials. d. This year Vega Corporation pays a $2,200 security deposit on space it rents for a new office. In addition, Vega pays current year rent of $15,000. The security deposit is refundable if the property is returned in good condition
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