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P 3 offers a warranty on party tents that it sells. During 2021, P 3 sold 1,000 tents at $800 each. P 3 estimates that

  1. P3 offers a warranty on party tents that it sells. During 2021, P3 sold 1,000 tents at $800 each. P3 estimates that 5% of the tents will be brought back for warranty repairs at an average cost of $75 per repair. During 2021, 10 tents were repaired under warranty claims at a total cost of $845. (you do not need to record the sales transaction)
  2. As a promotion of its Adventure Party line, P3 offers $50 rebates to clients who take 5 hot air balloon adventures. During 2021, 800 clients purchased hot air balloon adventures. P3 estimates that 10% of these clients will take advantage of the rebate offer. During 2021, 16 customers received the hot air balloon rebate.

  1. P3 is involved in two legal matters.
    • A customer who purchased helium balloons from P3 has sued for $1,000,000 because some of the balloons burst and the customers dogs were frightened and will now no longer go near anything that even resembles a balloon, such as balls or round lawn ornaments. The customer has had their two dogs in therapy but to no avail as the dogs are still frightened of round objects. The P3 legal team believes that it is likely that P3 will lose somewhere between $50,000 and $250,000. The customer has offered to settle for $750,000.
    • P3 has entered a lawsuit against one its former suppliers who failed to deliver goods as ordered and failed to either reimburse P3 for the goods or to replace the goods. The faulty products resulted in lost sales to P3 of $950,000 as well as damage to P3 s reputation thus P3 is seeking damages in the amount of $2,000,000. P3 s legal team believes P3 and the customer will reach an out of court settlement and estimates the range of the settlement to be between $750,000 and $1,200,000 but believes that $1,000,000 would be the most likely settlement.
    • Proper Journal Entries please

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