Question 12 (3 points) Hubba Club sells golf clubs to customers over the Internet. History has shown that 7% of Hubba's clubs will need repair under the warranty program For the year, Hubba has sold 4,000 golf sets and 85 have been repaired. If the estimated cost to repair a club set is $220, what would be the warranty liability at the end of the year? a) so. Ob) $61,600 OC) 543,400 d) $18,700 Question 13 (3 points) While providing services to Innocent Party, Bad Boy Bill caused damages of $125,000. As of the end of the year, both parties agree that it is probable that Bad Boy Bill will pay Innocent Party the full amount of the damages within the next two months. How would Bad Boy Bill and Innocent Party report the lawsuit at the end of the year? a) Bad Boy Bill reports a loss; Innocent Party reports nothing. O b) Bad Boy Bill reports nothing: Innocent Paty reports a gain c) Bad Boy Bill reports a loss; Innocent Party reports a gain O d ) Bad Boy Bill reports nothing: Innocent Party reports nothing Given the information below, what is the gross profit? Sales revenue Accounts receivable Ending inventory Cost of goods sold Sales returns $ 340,000 30,000 110,000 160,000 20.000 a) $180,000 b) $130,000 C) $160,000. d) $170,000. Question 15 (3 points) The Best Banjos, which records sales and sales tax separately, had sales on account of $1,500 and cash sales of $1,000. The state sales tax is 8%. The journal entry to record the sales would include a: a) Debit to Sales Tax Payable for $75. b) Debit to Cash of $1,000 O c) Credit to Sales Revenue of $2,700. d) Debit to Accounts Receivable of $1,600 and a debit to Cash of $1,080. Question 16 (3 points) Crazy Corporation reported the following amounts in its income statement: Sales revenue $ 875,000 Advertising expense 45.000 Interest expense 15,000 Salaries expense 55.000 Utilities expense 35,000 Income tax expense 40.000 Cost of goods sold 485.000 What was Crazy's gross profit? a) $350,000 b) $335,000 OC) $390,000 d) None of these. Blu Bungalows has 15 employees each working 40 hours per week and earning $30 an hour. Federal income taxes are withheld at 15% and state income taxes at 6%. FICA taxes are 7.65% and unemployment taxes are 3.8% of the first $7,000 earned per employee. What is the actual payroll payment (salaries payable) for the first week of January a) 55,157 Ob) $13,923 c) $18,000. d) $12,843. e) None of these. Question 18 (3 points) The Minnesota Zoo issues a bond due in 10 years with a stated interest rate of 8% and a face value of $170,000. Interest payments are made semi-annually. The market rate for this type of bond is 10%. What is the issue price of the bond (rounded to nearest whole dollar)? (Use a financial calculator or Excel) a) $142.660 Ob) $135,216. OC) $145,814. d) $164,564
