At the beginning of 2027, Angel Corporation began offering a…

At the beginning of 2027, Angel Corporation began offering a two-year warranty on its products. The warranty program was expected to cost Angel 4% of net sales. Net sales made under warranty in 2027 were $219 million. Fifteen percent of the units sold were returned in 2027 and repaired or replaced at a cost of $4.80 million. The amount of warranty expense on Angel’s 2027 income statement is:

Branch Company, a building materials supplier, has $17,400,0…

Branch Company, a building materials supplier, has $17,400,000 of notes payable due April 12, 2028. At December 31, 2027, Branch signed an agreement with First Bank to borrow up to $17,400,000 to refinance the notes on a long-term basis. The agreement specified that borrowings would not exceed 85% of the value of the collateral that Branch provided. At the date of issue of the December 31, 2027, financial statements, the value of Branch’s collateral was $19,400,000. On its December 31, 2027, balance sheet, Branch should classify the notes as:

Paul Company issues a product recall due to an apparently pr…

Paul Company issues a product recall due to an apparently preexisting and material defect discovered after the end of its fiscal year. Financial statements have not yet been issued. The action required of Paul Company for this reasonably estimable contingency for the year just ended is to: