Consolidated Business Services Introduced a New Machine on January 1

question 90

Multiple Choice

Consolidated Business Services introduced a new machine on January 1, 2010.The machine carried a two-year warranty against defects.The estimated warranty costs related to dollar sales were 3% in the year of sale and 5% in the year after sale.Additional information follows: $\begin{array}{rrr}&&\text { Actual Werranty }\\ \text { Year } & \text { Sales } & \text { Expenditures }\\2010 & \$ 50,000 & \$ 900 \\2011 & 80,000 & 4,200\end{array}$ If the expense warranty accrual method is used, what amount relating to warranties should be reflected on the December 31, 2011, balance sheet?

• A)$5, 300
• B)$6, 400
• C)$6, 500
• D)$9, 100

---

Definitions:

Resistance To Change

The reluctance or refusal to accept or adapt to changes within the organizational environment or personal life.

Unfounded Fears

Fears that lack a solid or rational basis, often stemming from misconceptions or misinformation.

Participation And Involvement

The act of taking part actively and being involved in activities or discussions, contributing to decision-making processes.

Organizational Diagnosis

Organizational diagnosis involves analyzing an organization's current state to identify strengths, weaknesses, and areas for improvement, often leading to strategic change.