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23 Aug
2019

using the expense warranty approach. | Good Grade Guarantee!

Prepare 2014 entries for Crow using the expense warranty approach. Assume that Crow estimates the total cost of servicing the warranties will be $190,000 for 2 years.
Prepare 2014 entries for Crow assuming that the warranties are not an integral part of the sale. Assume that of the sales total, $164,300 relates to sales of warranty contracts. Crow estimates the total cost of servicing the warranties will be $190,000 for 2 years. Estimate revenues earned on the basis of costs incurred and estimated costs.

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