Problem 13-7 Alvarado Company sells a machine for $7,780 with a 12-month warranty agreem ent that requires the company to replace all defective parts and to provide the repair labor at no cost to the customers. With sales being made evenly throughout the year, the company sells 820 machines in 2014 (warranty expense is incurred half in 2014 and half in 2015) As a result of product testing, the company estimates that the warranty costis $395 per machine (S176 parts and $219 labor). Use "Inventory" account to record the warranty expense Assuming that actu al warranty costs are incurred exactly as estimated, what journal entries would be made relative to the following facts? Under application of the expense warranty accrual method for: (1) Sale of machinery in 201-4 (2) Warranty costs incurred in 2014 (3) Warranty expense charged against 2014 revenues (4) Warranty costs incurred in 2015 Account Titles and Explanation 0 Debit Credit Under application of the cash-basis method for. (1) (2) (3) (4) Sale of machinery in 2014 Warranty costs incurred in 2014 Warranty expense charged against 2014 revenues Warranty costs incurred in 2015 f no entry is required, select "No Entry" for the account titles and enter 0 for the amounts. Credit account titdes are automatically indented when amount is entered. Do not indent manually.) No. Account Titles and Explanation Debit Credit What am ount, if any, is di sclosed in the balance sheet as a liability for future warranty costs as of December 31, 2014, under each method? (Do not leave any answer field blank. Enter for amownts.) Cash-basis method Accrual meth Warranty liability s List of Accounts Loss from Expropriation Loss on ARO Settlement No Entry Notes Payable Gl Plattorm Payroll Tax Expense Accounts Payable Accounts Receivable Accumulated Depreciation-Plant Assets Allowance from Expropriation Asset Retirement Obligation Cash Depreciation Expense Dividends Payable Due to Customer Discount on Notes Payable FICA Taxes Payable um Expense Premium Liability ases Purchase Discounts Purchase Returns and Allowances Retained Earnings Salaries and Wages Expense Salaries and Wages Payable Sales Revenue Sales Tax Payable SUTA Taxes Payable rei FUTA Taxes Payable Insur ance Premium Payable Interest Expense Interest Payable Inventory Inventory of Premiums Land Improvements Lawsuit Liability Lawsuit Loss Litigation Expense or Loss Litigation Liability ruc Unearned Sales Revenue Unearned Warranty Revenue Union Dues Payable Warranty Expense Warranty Liability Warranty Revenue Withholding Taxes Payable