I can not understand why I have to 309000*(4.5/24) on the working note. And how can I get 4.5 and why?

po a aonty at December 31, 2018? Carnes Electronics sells consumer electronics that carry a 90-day manufacturer's warranty. At the time of pur- chase, customers are offered the opportunity During the year, Carnes received $412,000 for these extended warranties (approximately evenly throughout the year) -16 alended to also buy a two-year extended warranty for an additional charge. Tntes 013-5, LO13-6 Required: 1. Does this situation represent a loss contingency? Why or why not? How should it be accounted for? 2. Prepare journal entries that summarize sales of the extended warranties (assume all credit sales) and any aspects of the warranty that should be recorded during the year. Debit Credit Date Particulars Dec.31 Uneamed revenue-extended warranties S 57,937.50 Revenue-extended warranties (W.N.) S 57,937.50 |(To record the extended warranties revemue) Explanation At the end of the ycar, if no warranty clectronics arc reccived back with complaints for repairs then the unearned revenue account credited for in the books at the time of sale of extended warranty should be cancelled by debiting it and crediting rcvenuc from extended warranty account for the revenue earned during the current period Working Note: If warranties don't earn any revenue for 90 days (after the free warranty cxpires), thcn only salcs up until 9/30 can carn any revenue, with sales on 1/1 earning nine months' worth of revenue, and sales on 9/30 earning one day of revenue. If sales proceed smoothly during thc ycar, we can assumc that, as of 9/30, thcy $412,000x 12 $309,000 have made of sales. So, during that nine-month period, the $309,000 is outstanding an average of 4.5 months, and 4.5 -x $309, 000 of revenue, or $57,937.50. so should earn 24 The key is to understand that, on average, January sales only produce 8.5 months of extended warranty revenue, because some of January sales occur near the end of the month and so are basically the same as February sales. Adding up months in that fashion (8.5+7.5 +6.55.5 4.5 3.52.51.5+0.5) takes us to 40.5 ($412,000 12 $57,937.50 months, and 40.5) x- 24