In 2020, EDSA Company began selling a new line of television that carry a two year warranty against defects. Based upon past experience with other products , the entity estimated warranty cost as a percentage of peso sales. First year of warranty 2%, Second year warranty 5%. In 2020 Total sales amounted to 5 million and actual warranty cost incurred amounted to 100,000 while in 2021 Total sales amounted to 7,000,000.00 and actual warranty cost amounted to 300,000.00. In addition, the company were able to sell extended warranty for 60,000 in 2020 and 80,000 in 2021. How much is the total liability to be reported for 2021?

580,000.00

310,000.00

440,000.00

250,000.00

EDSA company is a defendant in a patent infringement suit . The lawyer believes there is a 70% chance that the court will not dismiss the case and the entity will incur no outflow of economic benefits. However if the court rules in favor of the claimant, the lawyer believe that there is a 20% chance that the entity will be required to pay damages of 200,000 and an 80% chance that the entity will be required to pay damages of 100,000. Other outcomes are unlikely. The court is expected to rule in late December 2021 . There is no indication that the claimant will settle out of court. The 7% risk adjustment factor to the probability-weighted expected cash flows is considered appropriate to reflect the uncertainties in the cash flow estimates. An appropriate discount rate is 5% per year. The present value of 1 at 5% for one period is .95. What is the amount of measurement of lawsuit?

0

85,836

100,000

89,880

On January 1, 2021 EDSA company entered into an 8 year lease of a floor of building with useful life of 15 years with the following terms: 1) Annual rental for the first three years payable at the end of each year - 300,000 b) Annual rental for the next five years payable at the end of each year - 400,000 c) Implicit interest rate 10% d) incremental borrowing rate 12% e) PV of an ordinary annuity of 1 at 10% for three periods 2.49 , PV of an ordinary annuity of 1 at 10% for five periods 3.79 , PV of 1 at 10% for three periods .75 f) PV of an ordinary annuity of 1 at 12% for three periods 5.92 , PV of an ordinary annuity of 1 at 12% for five periods 4.725 , PV of 1 at 12% for three periods .711. The lease provides for neither a transfer of title to the lessee nor a purchase option. What is the interest expense for 2020?

319,350

226,300

169,725

151,460