CraneCompany sells televisions at an average price of $965and also offers to each customer a separate 3-year warranty contract for $96that requires the company to perform periodic services and to replace defective parts. During 2017, the company sold303televisions and273warranty contracts for cash. It estimates the 3-year warranty costs as $19for parts and $29for labor, and accounts for warranties separately. Assume sales occurred on December 31, 2017, and straight-line recognition of warranty revenues occurs.

part 1

Record any necessary journal entries in 2017.

Part 2

What liability relative to these transactions would appear on the December 31, 2017, balance sheet and how would it be classified?

CraneCompany

Balance Sheet (Partial)

December 31, 2017

Part 3

In 2018,CraneCompany incurred actual costs relative to 2017 television warranty sales of $1,820for parts and $4,090for labor.

Record any necessary journal entries in 2018 relative to 2017 television warranties. Use "Inventory" account to record the warranty expense.

Part 4

What amounts relative to the 2017 television warranties would appear on the December 31, 2018, balance sheet and how would they be classified?

CraneCompany

Balance Sheet (Partial)

December 31, 2018