Cullumber Hardware takes pride as the "shop around the corner" that can compete with the big$-$box home improvement stores by

providing good service from knowledgeable sales associates $($many of whom are retired local handymen$).$ Cullumber has developed

the following two revenue arrangements to enhance its relationships with customers and increase its bottom line.

Cullumber sells a specialty portable winch that is popular with many of the local customers for use at their lake homes

$($putting docks in and out, launching boats, etc.$).$ The Cullumber winch is a standard manufacture winch that Cullumber

modifies so the winch can be used for a variety of tasks. Cullumber sold $90$ of these winches during $2025$ at a total price of

$$29,700,$ with a warranty guarantee that the product was free of any defects. The cost of winches sold is $$15,300.$ The

assurance warranties extend for a $3-$year period with an estimated cost of $$2,700.$ In addition, Cullumber sold extended

warranties related to $20$ Cullumber winches for $2$ years beyond the $3-$year period for $$370$ each.

To bolster its already strong customer base, Cullumber implemented a customer loyalty program that rewards a customer

with $1$ loyalty point for every $$10$ of purchases on a select group of Cullumber products. Each point is redeemable for a $$1$

discount on any purchases of Cullumber merchandise in the following $2$ years. During $2025,$ customers purchased select

group products for $$95,000($all products are sold to provide a $45\%$ gross profit$)$ and earned $9,500$ points redeemable for

future purchases. The standalone selling price of the purchased products is $$95,000.$ Based on prior experience with

incentives programs like this, Cullumber expects $9,100$ points to be redeemed related to these sales $($Cullumber appropriately

uses this experience to estimate the value of future consideration related to bonus points$).$

$($b$)$

Your answer is partially correct.

Prepare the journal entries for Cullumber related to the sales of Cullumber winches with warranties. $($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. Do not round intermediate calculations. Round final answers to $0$ decimal places, e$.$g$.5,125.$ List all debit

entries before credit entries.$)$

Account Titles and Explanation

Debit

Credit

Liability to Bonus Point Customers

$($To record sales$)$