Give an example of an assurance-type warranty and an example of a service-type warranty. Be specific:...

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Accounting

Give an example of an assurance-type warranty and an example ofa service-type warranty. Be specific: think about the types ofwarranties offered by businesses. I want real life examples.
In general, what are two key differences in these two types ofwarranties? Explain, explain, explain!

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SolutionGive an example of an assurancetype warranty and anexample of a servicetype warrantyVendor A manufactures and sells a model of luxury sports carsIncluded in the cars price is a fiveyear warranty that is twoyears longer than warranties provided by other car manufacturersin addition the law only requires Vendor A to provide a threeyearwarrantyOn January 1 20X1 Vendor A sells a car to a customer for200000 The cars estimated standalone selling price is 180000and the extra two years of warranty is 20000 Vendor A deliversthe car on January 1 20X1 and the See Answer

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