Hipster Corrector guarantees its snowmobiles for three years. Company experience indicates that warranty costs will be approximately 3% of sales. Assume that the Hipster dealer in Colorado Springs made sales totaling $350,000 during 2016. The company received cash for 20% of the sales and notes receivable for the remainder. Warranty payments totaled $8,000 during 2016. Record the sales, warranty expense, and warranty payments for the company. Ignore cost of goods sold. Post to the Estimated Warranty Payable T-account. At the end of 2016, how much in Estimated Warranty Payable does the company owe? Assume the Estimated Warranty Payable is $0 on January 1, 2016. Fernandez Motors, a motorcycle manufacturer, had the following contingencies. a. Fernandez estimates that it is reasonably possible but not likely that it will lose a current lawsuit. Fernandez's attorneys estimate the potential loss will be $3, 200,000. b. Fernandez received notice that it was being sued. Fernandez considers this lawsuit to be frivolous. c. Fernandez is currently the defendant in a lawsuit. Fernandez believes it is likely that it will lose the lawsuit and estimates the damages to be paid will be $60,000. Determine the appropriate accounting treatment for each of the situations Fernandez is facing