American Business Services Introduced a New Machine on January 1

question 15

Multiple Choice

American Business Services introduced a new machine on January 1, 2016. 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: Actual Warranty If American Business Services considers these warranties to be assurance-type and accounts for them by accruing the expense and the related liability) in the year of the sale, what amount relating to warranties should be reflected on the December 31, 2017, balance sheet?

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

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Definitions:

Primary Care Services

Basic or general health care services provided by practitioners who serve as the first point of contact for patients entering the health care system.

Healthy Community

A community that promotes and maintains the physical, mental, and social well-being of its residents through accessible healthcare, environmental cleanliness, and supportive social networks.

Immunization Services

Healthcare services dedicated to administering vaccines to protect individuals from infectious diseases.

Initial Home Visit

The first visit made by a healthcare or social service provider to a patient's or client's home to assess needs and provide services.