Question: 1. Motorola is a world leader in the development of cellular phone technology. During the year, the company becomes aware of potential costs due to
(1) a product defect that is reasonably possible and can be reasonably estimated,
(2) a safety hazard that is probable and cannot be reasonably estimated, and
(3) a new product warranty that is probable and can be reasonably estimated. Which of these potential costs, if any, should Motorola record?
2. Under Armour has the following current assets: cash, $102 million; receivables, $94 million; inventory, $182 million; and other current assets, $18 million. Under Armour has the following liabilities: accounts payable, $98 million; current portion of long-term debt, $35 million; and long-term debt, $23 million. Based on these amounts, calculate the current ratio and the acid-test ratio for Under Armour.