Q.2

What condition is necessary to recognize an environmental liability? O A Obligation event has occurred O B. Company has an existing legal obligation O Company can reasonably estimate the amount of the liability OD. Company has an existing legal obligation and can reasonably estimate the amount of the liability Alpha Company sells laptops under a 2-year warranty contract that requires the company to replace defective parts and to provide necessary repairs. During 2019, Alpha sells 350 laptops at a unit price of $2,000. Based on past experience, the 2 year warranty costs are estimated to be $133 for parts and $157 for labor per unit. In 2019, Alpha spent $46,550 servicing warranty claims. What the amount to be reported for the warranty liability by the end of 2019? O A $46,550 O $54,950 O c $700,000 O 0.5101,500