Early in 2017, Sheryl Crow Equipment Company sold 500 Rollomatics during 2017 at $6,000 each. During 2017, Crow spent $20,000 servicing the 2-year assurance warranties that accompany the Rollomatic. All applicable transactions are on a cash basis.

Prepare 2017 entries for Crow assuming that the warranties are not an integral part of the sale (a service-type warranty). Assume that of the sales total, $56,000 relates to sales of warranty contracts. Crow estimates the total cost of servicing the warranties will be $55,000 for 2 years. Estimate revenues to be recognized on a straight-line basis. (If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts. Credit account titles are automatically indented when amount is entered. Do not indent manually. Round intermediate calculations to 5 decimal places, e.g. 1.54657 answers to 0 decimal places, e.g. 5,125.)

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Date Account Titles and Explanation Debit Credit At Sale Cash 3,000,000 Sales Revenue 2,944,000 Unearned Warranty Rev 56,000 During 2017 [Warranty Expense 20,000 20,000 Dec. 31, 2017 [Unearned Warranty Reven 20364 Warranty Revenue 20364 (To record warranty revenue) Warranty Expense Warranty Liability (To record warranty liability) Date Account Titles and Explanation Debit Credit At Sale Cash 3,000,000 Sales Revenue 2,944,000 Unearned Warranty Rev 56,000 During 2017 [Warranty Expense 20,000 20,000 Dec. 31, 2017 [Unearned Warranty Reven 20364 Warranty Revenue 20364 (To record warranty revenue) Warranty Expense Warranty Liability (To record warranty liability)

Answer rating: 100% (QA)

Date Account Titles and Explanation Debit Credit Cash At sale 3000000 500 x 6000 Sales 294400... View the full answer