Galaxy Corporation manufactures custom motorcycles. Galaxy finances the motorcycles over $36$ months for customers who make a minimum down payment of $10\%.$ Historically, Galaxy has experienced bad debt losses equal to $1\%$ of sales. Galaxy also provides a $24$ month unlimited warranty on all new motorcycles. In the past, warranty expense has averaged $3\%$ of sales. Ignoring taxes, how does the recognition of bad debt expense and warranty expense at the time of sale affect Galaxy's liabilities?