John 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. John expects warranty costs to be 3% 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 $122 for materials taken from the repair parts inventory. These are the only repairs required in Year 2 for this copier. 1a. How much warranty expense does the company report for this copier in Year 1? 1b. How much is the estimated warranty liability for this copier as of December 31 of Year 1? 1c. How much is the estimated warranty liability for this copier as of December 31 of Year 2? 1d. Prepare journal entries to record (a) the copiers 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.

Aug 16: Record the sale of a copier for $11,000 cash. Aug 16: Record the cost of goods sold of $5,500. Dec 31: Record the estimated warranty expense at 3% of the sales. On Jan. 5 of year 2, the copier requires on site repairs that are completed the same day. the repairs cost $122 for materials taken from the repair parts inventory. Record the cost of the repair.

Date	General Journal	Debit	Credit
Aug 16
Aug 16
Dec 31
Jan 05