Which of the following can be described as involving direct finance? people buy shares in a mutual fund. people buy shares of common stock in the primary markets. a corporation takes out loans from a bank. a corporation buys a short-term corporate security in a secondary market.

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?