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At the end of 2019, JenCo has a balance of $72,000 in the warranty liability account, and $60,000 in unearned revenue. Unearned revenue consists of
At the end of 2019, JenCo has a balance of $72,000 in the warranty liability account, and $60,000 in unearned revenue. Unearned revenue consists of one job, paid for by Travis McAllister. These balances were all correctly calculated. Transactions in 2020 are summarized as follows: Customers made deposits of $67,000 on work that will be carried out in the next fiscal period. Sales of $4,280,000 were recorded for goods that carried a warranty. Warranty work is estimated to cost 2% of sales. Warranty claims were made during the year. JenCo spent $22,000 on parts and $65,000 in labour on warranty work. Work was completed and delivered to Travis McAllister, who had paid in full in advance. There was no warranty associated with this job. Please make sure your final answer(s) are accurate to the nearest whole number. a) List the amount of the service revenue that would appear on the 2020 income statement. The warranty does not meet the definition of a distinct service under IFRS 15. b) List the balance of the warranty expense account that would appear on the 2020 income statement as a result of the 2020 transactions. c) What amount should be reported on the 2020
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