Problem 3 (25 points) Please show all calculations Miley Equipment Company sells computers for $1,800 each. During 2019, the company sold m computers on account. Each computer comes with a 2-year warranty that requires the company to perform periodic services and to replace defective parts (covering years 2020 and 2021). There is no additional charge for this 2-year warranty. Based on past experience, the company has estimated the total 2-year warranty costs per computer as $40 for parts and $70 for labor. During 2019, Miley Equipment Company also sold 600 extended warranties for $300 cash each on cover periodic services and replacement of defective parts for an additional 3 years following the expiration of the 2-year warranty. The extended warranty covers years 2022 through 2024 (Assume all sales occur on December 31, 2019.) In 2020, Miley incurred actual warranty costs relative to 2019 computer sales of $12,000 for parts and $24,000 for labor. Required (a) Prepare the journal entries to record the computer sales and related warranty transactions for 2019 and 2020. Problem 4 (10 points) Please show all calculations Below are three independent situations. 1. In August, 2021, a worker was injured in the factory in an accident partially the result of his own negligence. The worker has sued Barkley Co. for $900,000. Counsel believes it is reasonably possible that the outcome of the suit will be unfavorable and that the settlement would cost the company approximately $600,000. 2. A suit for breach of contract seeking damages of $4,500,000 was filed by an author against Henderson Co. on October 4, 2021. Henderson's legal counsel believes that an unfavorable outcome is probable. The expected settlement is estimated to be an award to the plaintiff between $3,200,000 and $4,000.000 3. Kroft is involved in a pending court case. Kroft's lawyers believe it is probable that Kroft will be awarded damages of $2,000,000. Required: Based on generally accepted accounting principles (GAAP), consider each of the above situations and indicate the proper accounting treatment including journal entries (prepare the journal entries if required, indicate no entry if not required) and notes to the financial statements (indicating the information to be included in any required notes). Include the rationale for your answers based on GAAP 3