Early in Crow Equipment sold Rollomatics at $ each. During Crow spent $ servicing the year assurance warranties that accompany the Rollomatic. All applicable transactions are on a cash basis.

Instructions

a Prepare entries for Crow. Assume that Crow estimates the total cost of servicing the warranties in the second year will be $

b Prepare entries for Crow assuming that the warranties are not an integral part of the sale a servicetype warranty Assume that of the sales total, $ relates to sales of warranty contracts. Warranty costs incurred in were $ Estimate revenues to be recognized on a straightline basis.