You have been running a landscaping business called trim grass for about two years. you have developed a special blend of grass seed for your area that you use when you reseed your clients’ lawns. you are receiving e-mails via your web site from people who would like to purchase some. you decide to start selling seed online, and you hire someone to rebuild your web site. which statement is false?

Right medical introduced a new implant that carries a five-year warranty against manufacturer’s defects. based on industry experience with similar product introductions, warranty costs are expected to approximate 2% of sales. sales were $8 million and actual warranty expenditures were $42,750 for the first year of selling the product. what amount (if any) should right report as a liability at the end of the year?