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Exercise 13-16 (Algo) Extended warranties (LO13-5, 13-6) Carnes Electronics sells consumer electronics that carry a...

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Exercise 13-16 (Algo) 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 received $414,000 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 and any aspects of the warranty that should be recorded during the year. ces Complete this question by entering your answers in the tabs below. Reg 1A Reg 1B Reg 2 Does this situation represent a loss contingency? Loss contingency

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