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Sheryl Crow Equipment Company sold 558 Rollomatics during 2014 at $6,740 each. During 2014, Crow spent $38,000 servicing the 2-year warranties that accompany the Rollomatic. All applicable transactions are on a cash basis.
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.
Sheryl Crow Equipment Company sold 558 Rollomatics during 2014 at $6,740 each. During2014, Crow spent $38,000 servicing the 2-year warranties that accompany the Rollomatic. Allapplicable…
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