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Computer Wholesalers restores and resells notebook computers on eBay. It originally acquires the notebook computers from corporations upgrading their computer systems, and it backs each

Computer Wholesalers restores and resells notebook computers on eBay. It originally acquires the notebook computers from corporations upgrading their computer systems, and it backs each notebook it sells with a 90-day warranty against defects. Based on previous experience, Computer Wholesalers expects warranty costs to be approximately 4% of sales. By the end of the first year, sales and actual warranty expenditures are $490,000 and $17,500, respectively 1. Does this situation represent a contingent liability? Yes No 2and3. Record the necessary entries in the Journal Entry Worksheet below 4.What is the balance in the Warranty Liability account after the entries in Part 2 and 3?

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