Assume for this part that Velocity Vehicles follows the warranty revenue approach at the start of 2020, to facilitate its transition when it goes public. Given repair costs are not evenly distributed over the two-year contract term, revenue recognition follows the cost-incurred trend. What would be the ending balances of unearned warranty revenue in 2020 and 2021?

 

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To determine the ending balances of unearned warranty revenue for Velocity Vehicles in 2020 and 2021 ... View the full answer