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 6% of sales. By the end of the first year, sales are $750,000. Required: 1. Does this situation represent a contingent liability? 2. What is the journal entry required at the end of the first year related to warranty costs? 3. Actual warranty expenses incurred are $10,000, record the appropriate journal entry. 4. What is the ending balance in the Warranty Liability account after the entries in parts 2 and 3