Apple sells a laptop $($that costs $$7,500)$ for $$15,000$ cash with a two$-$year parts warranty to a customer on September $20$ of Year $1.$ Apple expects warranty costs to be $4\%$ of dollar sales. It records warranty expense with an adjusting entry on December $31.$ On January $6$ of Year $2,$ the laptop requires on$-$site repairs that are completed on the same day. The repair costs $$101$ for materials taken from the Parts Inventory. These are the only repairs required in Year $2$ for this laptop.

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Req $1$ to $3$

How much warranty expense does the company report for this laptop in Year $1?$

How much is the estimated warranty liability for the laptop as of December $31$ of Year $1?$

How much is the estimated warranty liability for the laptop as of December $31$ of Year $2?$