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  3. hitzu co. sold a copier (that costs $6,500) for $1

Hitzu Co. sold a copier (that costs $6,500) for $13,000 cash with a two-year parts...

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Accounting

Hitzu Co. sold a copier (that costs $6,500) for $13,000 cash with a two-year parts warranty to a customer on August 16 of Year 1. Hitzu
expects warranty costs to be 6% of dollar sales. It records warranty expense with an adjusting entry on December 31 On January 5 of
Year 2, the copier requires on-site repairs that are completed the same day. The repairs cost $114 for materials taken from the repair
parts inventory. These are the only repairs required in Year 2 for this copier.
How much warranty expense does the company report for this copier in Year 1?
How much is the estimated warranty liability for this copier as of December of Year 1?
Estimated warranty liability
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