Answer the following independent questions. Be sure to show all required calculations. Instructions: Prepare the necessary required year-end adjusting entries at December 31, 2020, if applicable, that should be recorded as a result of each of the following transactions. If no journal entry is required, indicate that in your answer and explain why you believe this to be true. 1. Best Awnings Company sells awnings for windows and decks. Their products carry a one-year warranty against manufacturer's defects. Based on previous experience, warranty costs are expected to be approximately 6% of sales. Sales were $5 million (all credit) for 2020. Actual warranty expenditures during 2020 were $218,600 and were recorded as warranty expense when incurred. (4 points) 2. Royal Toy Company is defending against a product liability suit. Royal's management and legal team believes it is probable that Royal will lose in court. If they lose, management and the legal team believes that the damages could be in the range of $650,000 to $1,200,000, with any damages in that range equally likely. (3 points) 3. On August 1, 2020, Walpole Chemicals received refundable deposits from customers for reusable containers in the amount of $250,000. Deposits charged to customers are twice the actual cost of the containers. Deposits are considered forfeited if not returned within 3 months. At December 31, 2020, 75% of the containers were returned within the 3 months. (3 points) Answer the following independent questions. Be sure to show all required calculations. Instructions: Prepare the necessary required year-end adjusting entries at December 31, 2020, if applicable, that should be recorded as a result of each of the following transactions. If no journal entry is required, indicate that in your answer and explain why you believe this to be true. 1. Best Awnings Company sells awnings for windows and decks. Their products carry a one-year warranty against manufacturer's defects. Based on previous experience, warranty costs are expected to be approximately 6% of sales. Sales were $5 million (all credit) for 2020. Actual warranty expenditures during 2020 were $218,600 and were recorded as warranty expense when incurred. (4 points) 2. Royal Toy Company is defending against a product liability suit. Royal's management and legal team believes it is probable that Royal will lose in court. If they lose, management and the legal team believes that the damages could be in the range of $650,000 to $1,200,000, with any damages in that range equally likely. (3 points) 3. On August 1, 2020, Walpole Chemicals received refundable deposits from customers for reusable containers in the amount of $250,000. Deposits charged to customers are twice the actual cost of the containers. Deposits are considered forfeited if not returned within 3 months. At December 31, 2020, 75% of the containers were returned within the 3 months. (3 points)