Question 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.
Question 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.