41. Big Bear BBQ Company sold 200 smokers during 2025 for $1…

41. Big Bear BBQ Company sold 200 smokers during 2025 for $1,700 each together with a 1-year warranty. Warranty claims are estimated to be $150 per smoker. Actual warranty claims on the smokers in 2025 were $12,550. Actual warranty claims on the smokers in 2026 are $18,500. What amount of warranty liability would Big Bear report at December 31, 2025?

42. A flash flood swept through FMB, Inc.’s warehouse on May…

42. A flash flood swept through FMB, Inc.’s warehouse on May 1. After the flood, FMB’s accounting records showed the following: Inventory, January 1  $  45,000 Purchases, January 1 through May 1  $ 145,000 Sales, January 1 through May 1  $ 200,000 Inventory not damaged by flood  $   60,000 Gross profit percentage on sales 45% What amount of inventory was lost in the flood?

32. Suppose your company constructed a new building. Constru…

32. Suppose your company constructed a new building. Construction began on April 1, 2026 with an expenditure of $500,000; then $600,000 on August 31, 2026; and finally $200,000 on November 30, 2026, at which time the building was completed. What is the capitalization period for the April 1, 2026 expenditure?