Analyze each of the following transactions from Exercise 9-12: 

(a) The copier’s sale; 

(b) The adjustment to recognize the warranty expense on December 31 of Year 1; 

(c) The repairs that occur on January 5 of Year 2. 

Show each transaction’s effect on the accounting equation—specifically, identify the accounts and amounts (including + or –) for each.

Exercise 9-12

Hitzu Co. sold a copier (that costs $4,800) for $6,000 cash with a two-year parts warranty to a customer on August 16 of Year 1. Hitzu expects warranty costs to be 4% of dollar sales. It records warranty expense with an adjusting entry on December 31. On January 5 of Year 2, the copier requires on-site repairs that are completed the same day. The repairs cost $209 for materials taken from the repair parts inventory. These are the only repairs required in Year 2 for this copier.