em 2 of 23 A contingent liability that is reasonably possible a. does not require treatment. b. should be recorded and disclosed. c. should be disclosed only. d. should be recorded only. sm #3 of 23 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 a. $19,600. b. $8,400. c. $28,000. d. $0. em #5 of 23 Estimating and recording product warranty expense in the period of the sale best follows which of the following? a. Matching principle b. Cost principle c. Business entity assumption d. Materiality concept