Ray and carin are parents in an accounting firm. the partners have entered into an arm’s length agreement requiring ray to purchase carin’s partnership interest from carin’s estate if she dies before ray. the price is set at 120% of the book value of carin’s partnership interest at the time of her death. ray purchased an insurance policy on carin’s life to fund this agreement. after ray had paid $45,000 in premiums, carin was killed in an automobile accident, and ray collected $800, of life insurance proceeds. ray used to life insurance proceeds to purchase carin’s partnership interest. what amount should ray include in his gross income from receiving the life insurance proceeds?

Analyzing and computing accrued warranty liability and expense waymire company sells a motor that carries a 60-day unconditional warranty against product failure. from prior years' experience, waymire estimates that 2% of units sold each period will require repair at an average cost of $100 per unit. during the current period, waymire sold 69,000 units and repaired 1,000 units. (a) how much warranty expense must waymire report in its current period income statement? (b) what warranty liability related to current period sales will waymire report on its current period-end balance sheet? (hint: remember that some units were repaired in the current period.) (c) what analysis issues must we consider with respect to reported warranty liabilities?