Beck Company sells a product for $3,200. When the customer buys it, Beck provides a one-year warranty. Beck sold 120 products during 2017. Based on analysis of past warranty records, Beck estimates that repairs will average 4% of total sales.

Required

1. Prepare the journal entry to record the estimated liability.

2. Assume that during 2017, products under warranty must be repaired using repair parts from inventory costing $10,200. Prepare the journal entry to record the repair of products.

3. Assume that the balance of the Estimated Liability for Warranties account as of the beginning of 2017 was $1,100. Calculate the balance of the account as of the end of 2017.