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solve 11

11. Casa Corporation is a custom residential homebuilder that began business in 20X5. Any residence built by Casa has a two-year warranty that covers both parts and labor. Casa estimates its warnanty work to be 4% of the selling price of each residence. Casa's services are in high demand but given the quality of their eraftsmanship, the company only builds 6 houses per year. Casa had Home Sale Revenue in 20X5 of $4,065,000 and $4,305,000 in 20X6. Additionally. Casa shares the following information regarding actual warranty claims: Repairs performed on houses sold in 205 Repairs performed oa houses sold in 205 Repairs performed on houses sold in 206 Repairs performed on bouses sold in 20X5 Repairs perfomed on bouses sold in 206 tota Repains performed on houses sold in 205 Repains performed on houses sold in 206 Repairs performed on hoines sold is 20x7 ton Understanding that Casa reported an ending Warranty Payable balance on its 12/31/20X7 Balaace Sbeet of \$133.980, what was the Home Sale Revenue reported on the 12/31/20X7 locome Statement? A) $4,284,000 B) $5,253,375 C) 53,349,500 D) 54.450,000 E) NOTA Understanding that Casa reported an ending Warranty Payable balance on its 12/31/20X7 Balance Sheet of $133,980, what was the Home Sale Revenue reported on the 12/31/20X7 Income Statement? A) $4,284,000 B) 55,253,375 C) $3,349,500 D) $4,450,000 E) NOTA HINT: Make all entries for 20X5, 20X6, and 20X7 and post them to the Warranty Liability accoust. Key; 1.D 2, C 3, A 4. B 5. E 6. C 7. A 8., B 9. C 10. C 11. D