xercise 10-15 Warranty expense and liability LO4 CHECK FIGURE: 4. Ending 2018 balance $4:2 On December 6, 2017, Norwood Co., an office equipment supplier, sold a copier for cash of $12,000 cost $9,400) with a two-year parts and labour warranty. Based on prior experience, Norwood ex- ects eventually to incur warranty costs equal to 5% of the selling price. The fiscal year coincides ith the calendar year. On January 20, 2018, the customer returned the copier for repairs that were ompleted the same day. The cost of the repairs consisted of $198 for the materials taken from the ade parts inventory and $360 of labour that was fully paid with cash. These were the only repairs required in 2018 for this copier. on Required 1. How much warranty expense should the company report in 2017 for this copier? 2. How much is the warranty liability for this copier as of December 31, 2017? 3. How much warranty expense should the company report in 2018 for this copier? 4. How much is the warranty liability for this copier as of December 31, 2018? 5. Show the journal entries that would be made to record (a) the sale (assume a perpetual inventory ote system); (b) the adjustment on December 31, 2017, to record the warranty expense repairs that occurred in January 2018. Ignore sales taxes