Snow Wayfarers guarantees its snowmobiles for three years. Company experience indicates that warranty costs will be 2 percent of sales.

Assume that a Snow Wayfarers dealer made sales totalling \(\$ 600,000\) during 2020 , its first year of operations. The company received cash for 30 percent of the sales and notes receivable for the remainder. Warranty payments totalled \(\$ 10,000\) during 2020.

1. Record the sales, warranty expense, and warranty payments for Snow Wayfarers.

2. Post to the Estimated Warranty Payable T-account. At the end of 2020, what is the Estimated Warranty Payable balance for Snow Wayfarers?