Exercise 11-10 Warranty expense and liability computations and entries LO P4 Hitzu Co. sold a copier (that costs $5,500) for $11,000 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 $126 for materials taken from the repair parts inventory. These are the only repairs required in Year 2 for this copier. 1. How much warranty expense does the company report for this copier in Year 1? Warranty expense 2. How much is the estimated warranty liability for this copier as of December 31 of Year 1? Estimated warranty liability 3. How much is the estimated warranty liability for this copier as of December 31 of Year 2? Estimated warranty liability 4. Prepare journal entries to record (a) the copier's sale; (b) the adjustment to recognize the warranty expense on December 31 of Year 1; and (c) the repairs that occur on January 5 of Year 2. View transaction list Journal entry worksheet