Tractor World Offers Warranties on All Their Tractors

question 113

Multiple Choice

Tractor World offers warranties on all their tractors.They estimate warranty expense at 2.4% of sales.At the beginning of 2013,the Estimated warranty payable account had a credit balance of $900.During the year,Tractor World had $285,000 of sales,and had to pay out $5,100 in warranty payments.
-At the end of the year,what balance in Estimated warranty payable would be included in the balance sheet?

• A) $2,640
• B) $5,100
• C) $4,200
• D) $6,840

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Definitions:

Gastrointestinal Ulcers

Open sores that develop on the inner lining of the stomach, upper small intestine, or esophagus.

Chemical Properties

Characteristics of a substance that become evident during, or after, a chemical reaction; these include reactivity, flammability, and acidity.

Radial Artery

A major artery in the forearm that is often used for arterial blood gas sampling and as an access point for coronary angiography.

Arterial Blood Gas

A test that measures the amounts of oxygen and carbon dioxide in the arterial blood, indicating the efficiency of lung function.