Platinum Corp

question 52

Multiple Choice

Platinum Corp.uses the expense approach to account for warranties.They sell a used car for $30,000 on Oct 25, 2017, with a one year warranty covering parts and labour.Warranty expense is estimated at 2% of the selling price, and the appropriate adjusting entry is recorded at Dec 31, 2017.On March 12, 2018, the car is returned for warranty repairs.This cost Platinum $200 in parts and $120 in labour.When recording the March 12, 2018 transaction, Platinum would debit Warranty Expense with

• A)zero.
• B)$120.
• C)$200.
• D)$320.

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Definitions:

Symbolic Characteristics

These are the abstract, intangible qualities that represent ideas or concepts associated with an entity or brand, such as identity and cultural significance.

Product Line

A group of related products marketed under a single brand name by the same company.

Product Life-cycle

A concept in marketing that describes the stages a new product goes through from introduction to growth, maturity, and decline.