Lake Computers is a leader in the computer industry with over $56 billion in sales each year. A recent annual report for Lake contained the following note.

Warranty

We record warranty liabilities at the time of sale for the estimated costs that may be incurred under its limited warranty. Factors that affect our warranty liability include the number of installed units currently under warranty, historical and anticipated rates of warranty claims on those units, and cost per claim to satisfy our warranty obligation.

Required:

1. Assume that estimated warranty costs for the current year are $501.1 million and that $416.8 million of warranty work was performed during the year. Provide the journal entries required to recognize warranty expense and the warranty services provided during the year. Assume that all warranty services were paid for with cash. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field. Enter your answers in whole dollar not in millions (i.e., 1,000,000 not 1.0).)

Wendell Dougherty is a well-recognized brand in the entertainment industry with products ranging from broadcast media to parks and resorts. The following note is from a recent annual report:

Revenue Recognition

For non-expiring, multi-day tickets to our theme parks, we recognize revenue over a three-year period based on estimated usage patterns which are derived from historical usage patterns.

2. Assume that in the current year, Wendell Dougherty collected $91.3 million in multi-day tickets that will be used in the future. Also in the current year, Wendell Dougherty estimates that $4.55 million worth of multi-day tickets that have been sold in the past will not be used (e.g., they have been lost by customers). Provide the journal entries required to recognize (a) the receipt of the $91.3 million in cash and (b) the $4.55 million that Wendell Dougherty estimates will not be used. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field. Enter your answers in whole dollar not in millions (i.e., 1,000,000 not 1.0).)