Exercise 9-7A Effect of warranty obligations and payments on financial statements LO 9-4 The Chair Company provides a 120-day parts-and-labor warranty on all merchandise it sells. The Chair Company estimates the warranty expense for the current period to be $2,650. During this period, a customer returned a product that cost $1,830 to repair. Required a. Show the effects of these transactions on the financial statements using a horizontal statements model. Use for increase, "-" for decrease, and NA for not affected. In the Cash Flow column, indicate whether the item is an operating activity (OA), investing activity (IA), or financing activity (FA). b. & c. Prepare the journal entries to record the warranty expense for the period and payment for the actual repair costs. Complete this question by entering your answers in the tabs below. Reg A Reg B and C Show the effects of these transactions on the financial statements using a horizontal statements model. Use "+" for increase, "-" for decrease, ar for not affected. In the Cash Flow column, indicate whether the item is an operating activity (OA), investing activity (IA), or financing activity (FA (Leave no cells blank - be certain to select "NA" wherever required.) Assets Liabilities - Equity Revenue - Expenses Net Income Cash Flow Event Estimated warranty expense Actual warranty costs paid Red Band > View transaction list Journal entry worksheet