Chart of Accounts Chart at hesounta Ceneral dowernin crictak youncul Work expense warranty accrual method, a company recognizes the Narranty expense and a contingent liability for future se in the period of sale. This method assumes that the lakes the warranty offer to increase sales and, therefore, e estimated warranty expense against these sales. When the ses its resources to fulfill the warranty agreement, it both the liability and the asset it used to satisty the warranty. cessary joumal entries to record the above transactions using ish basis method. ing work? Assurance-Type Warranties Instructions On September 1,2016, Carolina Electronics Company has 1,110 Blu-ray players ready for sale. On October 1, 2016, 860 are sold, on account, at \$135 each with a 1-year assurance-type warranty. Carolina estimates that the warranty cost on each Blu-ray player sold will probably average $7 per unit. During the final 3 months of 2016, Carolina incurred warranty costs of $3,425, and in 2017 warranty costs were $2,595. Required: 1. Prepare the journal entries for the preceding transactions. 2. Show how the preceding items would be reported on the December 31, 2016, balance sheet. 3. Prepare the journal entries for the preceding transactions using the modified cash basis method. 4. Next Level Which method produces the better measure of income? Why? 1. the sale of Blu-ray players on account on October 1, 2016 2. the related warranty accrual on October 1, 2016 3. the warranty costs paid during the last quarter of 2016 4. the warranty costs paid during the 2017