Larkspur’s Agency sells an insurance policy offered by Capital Insurance Company for a commission of $103 on January 2, 2017. Larkspur will receive an additional commission of $9 each year for as long as the policyholder does not cancel the policy. After selling the policy, Larkspur does not have any remaining performance obligations. Based on Larkspur’s significant experience with these types of policies, it estimates that policyholders on average renew the policy for 4.5 years after the first year before terminating their insurance policy. It has no evidence to suggest that previous policyholder behavior will change.Determine the transaction price of the arrangement for Larkspur, assuming 100 policies are sold.Determine the revenue that Larkspur will recognize in 2017.

Das Medical introduced a new implant that carries a five-year warranty against manufacturer's defects. Based on industry experience with similar product introductions, warranty costs are expected to approximate 3% of sales. Sales were $9 million and actual warranty expenditures were $38,750 for the first year of selling the product. Complete the following T-account to determine the amount (if any) Das should report as a liability at the end of the year. Note: Enter your answers in whole dollars. Debit Beginning Balance Actual expenditures Ending Balance Answer is not complete. Warranty Liability 0 -11,750 38,750 → 27,000 0 -27,000 Credit Warranty expense

Moon Co. sells food blenders. During 2019, Moon made 37,000 blenders at an average cost of $80. It sold out 25,000 food blenders at an average price of $130. Moon provides a 2-year warranty for each blender sold and estimates 9% of blenders will be returned for warranty with an estimated cost of $36 each. By the end of 2019, Moon has spent $44,000 servicing the warranty repairs. All the above transactions have been settled in cash.   During 2019, Moon has 50 employees who work 5-day per week and get paid each other Friday. Salaries of $324,000 and payroll expense of $37,000 have been paid until December 22.   Since the business grows quickly, Moon needs cash to expand. By the end of 2018, the Board of Directors authorized the management to issue 10-year bonds with a par value of $3,000,000, annual contract interest rate of 8% and semi-annual interest payments. Moon chose to use the straight-line method to amortize discount or premium on its bonds.   On January 1, 2019, management…

Early in 2020, Pina Equipment Company sold 400 Rollomatics at $ 6,000 each. During 2020, Pina spent $ 20,000 servicing the 2-year assurance warranties that accompany the Rollomatic. All sales transactions are on a cash basis. Prepare 2020 entries for Pina. Assume that Pina estimates the total cost of servicing the warranties in the second year will be $ 37,000. (If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts. Credit account titles are automatically indented when amount is entered. Do not indent manually. Record journal entries in the order presented in the problem.) Prepare 2020 entries for Pina assuming that the warranties are not an integral part of the sale (a service-type warranty). Assume that of the sales total, $ 58,000 relates to sales of warranty contracts.Warranty costs incurred in 2020 were $ 20,000. Estimate revenues to be recognized on a straight-line basis. (If no entry is required, select "No Entry" for the account titles…