Swifty manufactures high-end whole home electronic systems. The company provides a one-year warranty for all products sold. The company estimates that the warranty cost is $250 per unit sold and reported a liability for estimated warranty costs $10.2 million at the beginning of this year. If during the current year, the company sold 59000 units for a total of $325 million and paid warranty claims of $12050000 on current and prior year sales, what amount of liability would the company report on its balance sheet at the end of the current year?

$14750000.

$233333.

$2700000.

$12900000.

2. Coronado Industries includes one coupon in each bag of dog food it sells. In return for eight coupons, customers receive a leash. The leashes cost Coronado $3 each. Coronado estimates that 60 percent of the coupons will be redeemed. Data for 2020 and 2021 are as follows:

		2020		2021
Bags of dog food sold		500000		580000
Leashes purchased		17000		21000
Coupons redeemed		110000		150000

The premium expense for 2020 is

$112500.

$114250.

$187500.

$74250.

2. On January 1, 2021, Bramble Corp. leased a building to Cullumber Company for a ten-year term at an annual rental of $173000. At inception of the lease, Bramble received $692000 covering the first two years' rent of $346000 and a security deposit of $346000. This deposit will not be returned to Cullumber upon expiration of the lease but will be applied to payment of rent for the last two years of the lease. What portion of the $692000 should be shown as a current and long-term liability, respectively, in Bramble's December 31, 2021 balance sheet?

Current Liability

Long-term Liability

$173000

$346000

$346000

$173000

$0

$692000

$346000

$346000