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Waterway Company sells televisions at an average price of $ 934 and also offers to each customer a separate 3-year warranty contract for $ 87

Waterway Company sells televisions at an average price of $ 934 and also offers to each customer a separate 3-year warranty contract for $ 87 that requires the company to perform periodic services and to replace defective parts. During 2020, the company sold 294 televisions and 214 warranty contracts for cash. It estimates the 3-year warranty costs as $ 21 for parts and $ 41 for labor, and accounts for warranties separately. Assume sales occurred on December 31, 2020, and straight-line recognition of warranty revenues occurs.

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