E 9-11 Cupola Awning Company introduced a new line of commercial awnings in 2022 that carry a two- Warranties year warranty against manufacturer's defects. Based on their experience with previous product OLO9-5 and introductions, warranty costs are expected to approximate 3% of sales. Sales and actual warranty LO9-6 expenditures for the first year of selling the product were: Sales Actual Warranty Expenditures $5,000,000 $37,500 Required: 1. Does this situation represent a provision? Why or why not? How should Cupola account for it? 2. Prepare journal entries that summarize sales of the awnings (assume all credit sales) and any aspects of the warranty that should be recorded during 2022. 3. What amount should Cupola report as a liability at December 31, 2022