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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
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: (Click the icon to view the table.) 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. Data table Car model Sale price Nova 15,600 $ Pinto 18,400 Estimated price of car 14,400 $ 14,800 Estimated price of warranty 1,520 2,050 Begin by computing the revenue that would be recognized upon delivery of the vehicle and deferred and recognized over five years for Nova. (Round your answers to the nearest dollar. For percentages, round your answers to three decimal places, X.XXX %.) Component price Nova Component price as percentage x Actual of total sale price =Allocation Car: immediate recognition Warranty: defer and amortize % % Total Next, calculate the revenue that would be recognized upon delivery of the vehicle and deferred and recognized over five years for Pinto. (Round your answers to the nearest dollar. For percentages, round your answers to three decimal places, X.XXX %.) Pinto Car: immediate recognition Warranty: defer and amortize Total Component price Component price as percentage x Actual of total sale price = Allocation % % %
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