Answer:
1. How much warranty expense does the company report in 2015 for this copier?
2. How much is the estimated warranty liability for this copier as of December 31, 2015?
3. How much warranty expense does the company report in 2016 for this copier?
4. How much is the estimated warranty liability for this copier as of December 31, 2016?
5a. Record the sale of a copier for $9,000 cash.
Dr Cash 9,000
Cr Sales revenue 9,000
5b. Record the cost of goods sold of $4,500.
Dr Cost of goods sold 4,500
Cr Inventory - merchandise 4,500
5c. Record the estimated warranty expense at 4% of the sales.
Dr Warranty expense 360
Cr Warranty liability 360
5d. Record the cost of $131 towards repair of copier on November 22, 2016.
Dr Warranty liability 131
Cr Inventory - repair parts 131
