Bramble Equipment Limited sold 460 Rollomatics on account during 2020 for $6,100 each. Ignore any cost of goods sold. During 2020, Bramble spent $25,800 servicing the two-year warranties that are included in each sale of the Rollomatic. All servicing transactions were paid in cash.

Prepare the 2020 entries for Bramble using the assurance-type (expense-based) approach for warranties. Assume that Bramble estimates (accurately) that the total cost of servicing the warranties will be $103,200 for two years and payments for completed warranty repairs are paid in cash. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts.)

Account Titles and Explanation Debit Credit

(To record sales on account)

(To record payment of warranty expense)

(To accrue warranty expense)

SHOW LIST OF ACCOUNTS

Prepare the 2020 entries for Bramble assuming that the warranties are not an integral part of the sale, but rather a separate service that is considered to be bundled with the selling price. Use the service-type (revenue-based) approach for warranties. Assume that of the sales total, $157,600 is identified as relating specifically to sales of warranty contracts. Bramble estimates the total cost of servicing the warranties will be $103,200 for two years. Because the repair costs are not incurred evenly, warranty revenues are recognized based on the proportion of costs incurred out of the total estimated costs. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts.)

Account Titles and Explanation Debit Credit

(To record sales on account)

(To record payment of warranty expense)

(To remeasure unearned revenue)

SHOW LIST OF ACCOUNTS

What amounts would be shown on Brambles income statement (a) Assuming Bramble uses the expense approach for warranties. (b) Assuming that the warranties are not an integral part of the sale. (Do not leave any answer field blank. Enter 0 for amounts. Enter negative amounts using either a negative sign preceding the number e.g. -45 or parentheses e.g. (45).)

(a) Using Expense approach (b) Warranties are not an integral part of the sale $ $ $ $