Derby Inc. is a manufacturer and retailer of bicycles. The company offers a 2 year standard (assurance type) warranty with all bikes sold to cover normal manufacturing defects. In the first quarter of 2020, Derby sold a total of 250 bikes at a retail price of $400 each. Each bike costs on average $225 to produce and, historically, the costs associated with the warranty average $75 per bike. The company accepts cash and debit cards as payment for the bikes. a) (6 marks) Prepare all journal entries related to the sale of the 250 bikes that occurred in the first quarter of 2020. b) (2 marks) In the second quarter, Derek brings in his bike for some repairs due to faulty steering. Derby paid $100 of labour and $30 for parts to repair Dereks bike. These costs were covered by the basic warranty. Prepare the journal entry to account for the repairs made to Dereks bike. c) (3 marks) The repairs on Dereks bike totalled $130 while the estimated average cost of the warranty was $75. Do you think that Derby made an error in estimating the warranty cost? Explain and support your answer. d) (4 marks) At the end of the second quarter, because of adverse economic conditions associated with a global pandemic, the expected selling price per bike has fallen to $230. The cost to sell each bike averages $20 per bike. There are 100 bikes in inventory at the end of the second quarter. What impact, if any, does this information have on the financial statements at the end of the second quarter? Explain and support your