Warranties Bombeck Company sells a product for $1,200. When the customer buys it, Bombeck provides a one-year warranty. Bombeck sold 190 products during 2017. Based on analysis of past warranty records, Bombeck estimates that repairs will average 3% of total sales. Required: 1. Identify and analyze the effect of the recording of the estimated liability. Activity Accounts Statement(s) How does this entry affect the accounting equation? If a financial statement item is not affected, select "No Entry" and leave the amount box blank. If the effect on a financial statement item is negative, i.e, a decrease, be sure to enter the answer with a minus sign. Assets Balance Sheet Liabilities Stockholders' Equity Revenues Income Statement 2. Assume that during 2017, products under warranty must be repaired using repair parts from inventory costing $6,522. Identify and analyze the effect of recording the repair of products. Activity Accounts Statement(s) Expenses How does this entry affect the accounting equation? If a financial statement item is not affected, select "No Entry" and leave the amount box blank. If the effect on a financial statement item is negative, i.e, a decrease, be sure to enter the answer with a minus sign. Balance Sheet Income Statement Assets = Liabilities + Stockholders' Equity Revenues Expenses Net Income Net = Income