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A.J. Smith Electronics is a retail consumer electronics company that also sells extended warranty contracts for many of the products that it carries. The extended
A.J. Smith Electronics is a retail consumer electronics company that also sells extended warranty contracts for many of the products that it carries. The extended warranty provides coverage for three years beyond expiration of the manufacturer's warranty. In 2022, A.J. Smith sold extended warranties amounting to $2,040,000. The warranty coverage for all of these begins in 2023 and runs through 2025. The total expected cost of providing warranty services on these contracts is $600,000 and is expected to be incurred evenly over the three-year warranty period. b. Estimate the revenue, expense, and gross profit reported from these contracts in the year(s) that the revenue is recognized. Round answers to the nearest whole number. c. Also in 2022 , as a special promotion, A.J. Smith sold a digital camera (retail price $300 ), a digital photograph printer (retail price $125 ), and an extended warranty contract for each (total retail price $75 ) as a package for a special price of $399. The extended warranty covers the period from 2023 through 2025 . The company sold 240 of these cameraprinter packages. Compute the revenue that A.J. Smith should recognize in each year from 2022 through 2025. Round answers to the nearest whole number
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