Hitzu Company sold a copier $($that costs $$3,500)$ for $$7,000$ cash with a two$-$year parts warranty to a customer on August $16$ of Year $1.$ Hitzu expects warranty costs to be $6\%$ 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 $$106$ for materials taken from the parts inventory. These are the only repairs required in Year $2$ for this copier.

Required:

How much warranty expense does the company report for this copier in Year $1?$

How much is the estimated warranty liability for this copier as of December $31$ of Year $1?$

How much is the estimated warranty liability for this copier as of December $31$ of Year $2?$

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 $2.$

Complete this question by entering your answers in the tabs below.

Req $1$ to $3$

Req $4$

How much warranty expense does the company report for this copier in Year $1?$

How much is the estimated warranty liability for this copier as of December $31$ of Year $1?$

How much is the estimated warranty liability for this copier as of December $31$ of Year $2?$

$\backslash$table$[[1.$ Warranty expense,$],[2.$ Estimated warranty liability as of December $31$ of Year $1,],[3.$ Estimated warranty liability as of December $31$ of Year $2,]]$

Req $4$