Power Company Sells Merchandise with a One Year Warranty

question 38

Multiple Choice

Power Company sells merchandise with a one year warranty. In 2012, sales consisted of 1,600 units. It is estimated that warranty repairs will average $10 per unit sold, and 30% of the repairs will be made in 2012 and 70% in 2013. In the 2012 income statement, Power should show warranty expense of

• A) $4,800
• B) $11,200
• C) $16,000
• D) $0

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Definitions:

ICD-10-PCS

International Classification of Diseases, Tenth Revision, Procedure Coding System; a medical classification system used to code procedures in the hospital setting.

HCPCS Level II Codes

A standardized coding system used medically to identify products, supplies, and services not included in the CPT codes, such as ambulance services and medical equipment.

Tabular List

A method of organizing data in rows and columns to facilitate easy understanding and analysis.

Index

A list or directory used to simplify the search for specific information, often found at the end of books or in databases.