Rotary Tools sells power tools and backs each product it sells with a one-year warranty against defects. Based on previous experience, the company expects warranty costs to be approximately 5% of sales. By the end of the first year, sales are $850,000. Actual warranty expenses incurred so far are $12,000. Required: 1. Does this situation represent a contingent liability? 2. \& 3. Record the appropriate journal entries for the warranties. 4. What is the ending balance in the Warranty Liability account after the entries in parts 2 and 3 ? Complete this question by entering your answers in the tabs below. Does this situation represent a contingent liability? Rotary Tools sells power tools and backs each product it sells with a one-year warranty against defects. Based on previous experience, ihe company expects warranty costs to be approximately 5% of sales. By the end of the first year, sales are $850,000. Actual warranty expenses incurred so far are $12,000. Required: 1. Does this situation represent a contingent liability? 2. \& 3. Record the appropriate journal entries for the warranties. 4. What is the ending balance in the Warranty Liability account after the entries in parts 2 and 3 ? Complete this question by entering your answers in the tabs below. Record the appropriate journal entries for the warranties. (If no entry is required for a particular transaction/event, select "No Journal Entry Required" in the first account field.) Journal entry worksheet 2 Record warranty expense and warranty liability for the year based on 5% of sales. Rotary Tools sells power tools and backs each product it sells with a one-year warranty against defects. Based on previous experience, the company expects warranty costs to be approximately 5% of sales. By the end of the first year, sales are $850,000. Actual warranty expenses incurred so far are $12,000. Required: 1. Does this situation represent a contingent liability? 2. \& 3. Record the appropriate journal entries for the warranties. 4. What is the ending balance in the Warranty Liability account after the entries in parts 2 and 3 ? Complete this question by entering your answers in the tabs below. What is the ending balance in the Warranty Liability account after the entries in parts 2 and 3