Problem 1: National Appliance Center sells washing machines that carry a three-year warranty against manufacturer's defects. Based on company experience, warranty costs are estimated at $60 per machine. During the year, National sold 48,000 washing machines and paid warranty costs of $340,000. In its income statement for the year ended December 31, National should report warranty expense of
a. $680,000.
b. $960,000.
c. $2,200,000.
d. $2,880,000.
Problem 2. Millward Corporation's books disclosed the following information for the year ended December 31, 2011:
Net credit sales ..................................... $1,500,000
Net cash sales ....................................... 240,000
Accounts Receivable at beginning of year ............. 200,000
Accounts Receivable at end of year ................... 400,000
Millward's accounts receivable turnover is:
a. 3.75 times.
b. 4.35 times.
c. 5.00 times.
d. 5.80 times.