Question $2$ of $23$

$\frac{-}{44\mathrm{.}9}$

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Cheyenne Music Emporium carries a wide variety of musical instruments, sound reproduction equipment, recorded music, and sheet music. Cheyenne uses two sales promotion techniques$-$warranties and premiums$-$to attract customers.

Musical instruments and sound equipment are sold with a $1-$year warranty for replacement of parts and labor. The estimated warranty cost, based on past experience, is $1\%$ f sales.

The premium is offered on the recorded and sheet music. Customers receive a coupon for each dollar spent on recorded music or sheet music. Customers may exchange $200$ coupons and $$30$ for an MP$3$ player. Cheyenne pays $$42$ for each player and estimates that $70\%$ of the coupons given to customers will be redeemed.

Cheyenne's total sales for $2025$ were $$6,978,000$;$$6,014,000$ from musical instruments and sound reproduction equipment and $$964,000$ from recorded music and sheet music. Replacement parts and labor for warranty work totaled $$97,000$ during $2025($ $$44,500$ of the work is related to pre$-2025$ sales$).$ A total of $6,920$ players used in the premium program were purchased during the year and there were $1,192,000$ coupons redeemed in $2025.$

The balances in the accounts related to warranties and premiums on January $1,2025,$ were as shown below.

$\backslash$table$[[$Premium Inventory,$$37,870$