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Exercise 13-16 Extended warranties [LO13-5, 13-6] Carnes Electronics sells consumer electronics that carry a 90-day manufacturer's warranty. At the time of purchase, customers are. offered

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Exercise 13-16 Extended warranties [LO13-5, 13-6] Carnes Electronics sells consumer electronics that carry a 90-day manufacturer's warranty. At the time of purchase, customers are. offered the opportunity to also buy a two-year extended warranty for an additional charge. During the year, Carnes recejved $432,000 for these extended warranties (approximately evenly throughout the year). Required: 1-a. Does this situation represent a loss contingency? 1.b. 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. Complete this question by entering your answers in the tabs below. Req 1A Req 18 Req 2 Does this situation represent a loss contingency? Loss contingency Reg 1A Req 18 Required: 1-a. Does this situation represent a loss contingency? 1.b. 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. Complete this question by entering your answers in the tabs below. Reg 1A Req 2 Req 18 How should it be accounted for? in 2018. Revenue is deferred as a and warranty expense is computed using the Req 1A Req 1B Req 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. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field. Round your answers to 2 decimal places.) View transaction list Journal entry worksheet Record the sale of extended warranty. Note: Enter debits before credits. Debit Credit Event General Journal View general journal Record entry Clear entry Req 1A Req 18 Req 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. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field. Round your answers to 2 decimal places.) View transaction list Journal entry worksheet 2 Record the revenue earned on extended warranty. Note: Enter debits before credits. Event General Journal Debit Credit View general journal Clear entry Record entry

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