Wildhorse Equipment Company sells computers for $1,350 each and also gives each customer a 2-year warranty that requires the company to perform periodic services and to replace defective parts. During 2020, the company sold 880 computers. Based on past experience, the company has estimated the total 2-year warranty costs as $40 for parts and $60 for labor. (Assume sales all occur at December 31, 2020.) In 2021, Wildhorse incurred actual warranty costs relative to 2020 computer sales of $13,200 for parts and $19,800 for labor.

Part 1

Under the expense warranty approach, give the entries to reflect the above transactions (accrual method) for 2020 and 2021. (Credit account titles are automatically indented when the amount is entered. Do not indent manually.)

Date	Account Titles and Explanation	Debit	Credit
2020	Sales RevenueCash, Accrued PayrollWarranty LiabilityAccounts ReceivableWarranty ExpenseInventory
	Sales RevenueCash, Accrued PayrollInventoryAccounts ReceivableWarranty ExpenseWarranty Liability
	(To record sale of computers)
2020	InventoryCash, Accrued PayrollSales RevenueWarranty ExpenseWarranty LiabilityAccounts Receivable
	Sales RevenueCash, Accrued PayrollAccounts ReceivableWarranty ExpenseInventoryWarranty Liability
	(To record liability against warranty costs)
2021	Sales RevenueWarranty LiabilityCash, Accrued PayrollAccounts ReceivableWarranty ExpenseInventory
	Accounts ReceivableWarranty LiabilityCash, Accrued PayrollInventoryWarranty ExpenseSales Revenue
	Warranty LiabilityCash, Accrued PayrollAccounts ReceivableInventorySales RevenueWarranty Expense

Part 2

The transactions of part (a) create what balance under current liabilities in the 2020 balance sheet?

Current Liabilities- Sales RevenueAccounts ReceivableWarranty LiabilityCash, Accrued PayrollWarranty Expense

$