Final answer:
Without additional details regarding Cobb's sales and warranty policies, it is impossible to determine the correct amount of deferred warranty revenue to be reported. Necessary financial data such as the sale amounts, warranty percentages, and service completion ratio are required for an accurate calculation.A is the correct answer.
Step-by-step explanation:
To determine which amount Cobb should report as deferred warranty revenue at December 31, 2020, we would need additional information regarding the company's sales and warranty policy.
Companies typically recognize warranty revenues over the period during which the warranty services are expected to be performed. This allocation is done in accordance with the matching principle of accounting, which aims to match revenues with the expenses incurred to generate them.
Since the question does not provide the necessary details to calculate the exact amount, I cannot provide the mentioned correct option in the final answer. For instance, we need to know the sale amounts, the percentage of sales allocated to warranty, the duration of the warranties, and how much of the warranty service was already performed during the year.