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When Four Paws Pet Shop sells a puppy, it provides a health warranty for the little critter. If a puppy becomes ill in the first two years after the sale, Four Paws Pet Shop will pay the vet bill up to $350. Because this is normally a significant expense for the shop, the accountant insists that Four Paws Pet Shop record an estimated warranty liability at the end of every year before the financial statements are prepared. On December 31, 2010, the accountant estimated that the warranty costs for puppies sold in 2010 would be $3,500 and made the appropriate entry to record that liability. On March 30, 2011, the store received a $50 vet bill from one of its customers, who had bought a puppy in 2010. Four Paws Pet Shop wrote a check for $50 to reimburse the puppy's owner. 1. Enter the transaction into the accounting equation to record the estimated warranty liability at December 31, 2010. 2. Enter the transaction into the accounting equation to record the payment of the vet bill on March 30, 2011. What effect did this payment have on the 2011 financial statements of Four Paws Pet Shop? 1. Enter the transaction into the accounting equation to record the estimated warranty liability at December 31, 2010. Some of the account names will be abbreviated. (Use parentheses or a minus sign when entering component decreases. Use only the necessary input lines.) Shareholders' Equity Assets Liabilities + + Contributed Capital $ Account Retained Earnings Account Account Account

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