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Exercise 9-10 Warranty expense and liability computations and entries LO P4 Hitzu Co. sold a copier (that costs $5,500) for $11,000 cash with a two-year parts warranty to a customer on August 16 of Year 1. Hitzu expects warranty costs to be 3 % 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 $147 for materlals taken from the repair parts inventory. These are the only repairs required in Year 2 for this copler. 1. How much warranty expense does the company report for this copier in Year 1? Warranty expense S 550 2. How much is the estimated warranty liability for this copier as of December 31 of Year 1? Estimated warranty liability S 550 3. How much is the estimated warranty liability for this copier as of December 31 of Year 2? Estimated warranty liability S 427 4. Prepare journal entries to record (a) the copler's sale; ( the adjustment to recognize the warranty expense on December 31 of Year 1 and ( the repairs that occur on January 5 of Year 2. View transaction list Journal entry worksheet > 2 3 4 Record the sale of a copier for $11,000 cash Note: Enter debits before credits General Journal Date Debit Credit Aug 16 Record entry View general journal Clear entry

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