A car manufacturer provides a service-type warranty for five years on sales of new vehicles. The following table provides information relating to two car models the company produces and sells:

Required:
Using the relative stand-alone selling prices, compute the revenue that would be (i) recognized upon delivery of the vehicle and (ii) deferred and recognized over five years for each of the car models.

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Car model Estimated price of car Estimated price of warranty Sale price Nova $15,000 $14,000 $1,500 Pinto 18,000 15,000 2,000