On December 31, 20x1, EXCEL Company recognized the following provisions:Dec. 31, 20x1 Warranty expense200,000Dec. 31, 20x1Estimated warranty obligationProbable loss on litigationEstimated liability on pending litigation400,000200,000400,000In 20x2, EXCEL incurred $260,000 in discharging its warranty obligation and settled the pending lawsuit forP360,000. How much is the net effect of the settlements of the provisions on profit or loss in 20x2?a. 20,000 increasec. 60,000 decreaseb. 20,000 decreased. 0

The warranty expenses are related to the expenses incurred to discharge the warranty related to the…

On December 31, 20x1, EXCEL Company recognized the following provisions: Dec. 31, 20x1 Warranty expense 200,000 Dec. 31, 20x1 Estimated warranty obligation Probable loss on litigation 400,000 Estimated liability on pending litigation 200,000 400,000 In 20x2, EXCEL incurred $260,000 in discharging its warranty obligation and settled the pending lawsuit for $360,000. How much is the net effect of the settlements of the provisions on profit or loss in 20x2? a. 20,000 increase c. 60,000 decrease b. 20,000 decrease d. 0

On December 31, 20x1, EXCEL Company recognized the following provisions: Dec. 31, 20x1 Warranty expense 200,000 Dec. 31, 20x1 Estimated warranty obligation Probable loss on litigation 400,000 Estimated liability on pending litigation 200,000 400,000 In 20x2, EXCEL incurred $260,000 in discharging its warranty obligation and settled the pending lawsuit for $360,000. How much is the net effect of the settlements of the provisions on profit or loss in 20x2? a. 20,000 increase c. 60,000 decrease b. 20,000 decrease d. 0

Principles of Accounting Volume 1

19th Edition

ISBN:9781947172685

Author:OpenStax

Publisher:OpenStax

Chapter12: Current Liabilities

Section: Chapter Questions

Problem 1MC: Which of the following is not considered a current liability? A. Accounts Payable B. Unearned...

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