Question 1 (1 point) Ruby's & Rings Inc. offers a two-year assurance warranty against failure of its products. The estimated liability is 4% of sales in the year of sale and 6% in the second year. Sales for 2020 and 2021 were: $2,500,000 and $2,800,000, respectively. The company incurred no warranty costs in 2020 but in 2021 they spent $175,000 on repairs related to the warranties issued in 2020 and 2021. The warranty expense for 2020 was 1) $80,000. 2) $250,000. 3) $100,000. 4) $150,000 Question 2 (1 point) The difference between the face value of a liability and its present value is due to the time value of money. 1) True 2) False Question 1 (1 point) Ruby's & Rings Inc. offers a two-year assurance warranty against failure of its products. The estimated liability is 4% of sales in the year of sale and 6% in the second year. Sales for 2020 and 2021 were: $2,500,000 and $2,800,000, respectively. The company incurred no warranty costs in 2020 but in 2021 they spent $175,000 on repairs related to the warranties issued in 2020 and 2021. The warranty expense for 2020 was 1) $80,000. 2) $250,000. 3) $100,000. 4) $150,000 Question 2 (1 point) The difference between the face value of a liability and its present value is due to the time value of money. 1) True 2) False