Audius Inc offers a variety of electronic instruments, tooling equipment, technical reference books, and audio training manuals. Audius uses warranties and premiums as sales promotion techniques to attract customers. Electronic instruments and tooling equipment are sold with a 1-year warranty for replacement of parts and labor. Estimated warranty cost, based on past experience, is 1.5% of sales. The premium offered on technical reference books and audio training manuals allows customers receive an MP3 player in exchange 250 for coupons and $25. Customers receive 1 coupon for each dollar spent on technical reference books and audio training manuals. Each MP3 player costs $35 and Audius estimates 65% of the coupons given to customers will be redeemed.

Audius total 2020 sales totaled $8,250,000 with $6,500,000 from electronic instruments and tooling equipment and $1,750,000 from technical reference books and audio training manuals. Warranty replacement parts and labor costs totaled $124,000 during 2020 ($64,000 of the work is related to pre-2020 sales). A total of 6,500 players used in the premium program were purchased during the year and there were 1,400,000 coupons redeemed in 2020. The balances in the accounts related to warranties and premiums on January 1, 2020, were as shown.

Premium inventory -- 42,500
Premium liability ----- 47,400
Warranty liability ------ 65,000

Determine following amounts for 2020 financial statements.

Warranty Expense
Warranty Liability
Premium Inventory
Premium Expense
Premium Liability

Answer rating: 100% (QA)

Answer a 97500 b 38500 c 45500 d 43400 e 36900 Explanation a Warranty expense Warranty expense 650... View the full answer