Part B

Marigold Company sells hot tubs at an average price of $2,000 and also offers to each customer a separate 5-year warranty contract for $230 that requires the company to perform periodic services and to replace defective parts. During 2020, the company sold 640 hot tubs and 450 warranty contracts for cash. It estimates the 5-year warranty costs as $45 for parts and $90 for labor and accounts for warranties separately. Assume sales occurred on December 31, 2020, and straight-line recognition of warranty revenues occurs. (a) Your answer is correct Record any necessary journal entries in 2020. (If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts. Credit account titles are automatically indented when amount is entered. Do not indent manually.) Credit Account Titles and Explanation Cash Debit 1,383,500 Sales 1.280,000 Uneamed Warranty Revenue 103,500 eTextbook and Media List of Accounts Attempts: 1 of 3 used (b) Your answer is partially correct. What liability relative to these transactions would appear on the December 31, 2020, balance sheet and how would it be classified? Marigold Company Balance Sheet (Partial) December 31, 2020 Current Liabilities Unearned Warranty Revenue $ 103,500 Long-term Debt . $