HANDOUT PROBLEM for CURRENT LIABILITIES I. Prepare journal entries for the following chronological transactions and a. You sold merchandise on account for $250,000 on account. The products cost $110,000. Your company uses a perpetual inventory system. Your sales included a two-year warranty on the product. b. C. d. e. You spent $1,400 to repair products in part "a." which were under warranty. On December 31, 2021, you estimated that there would be an additional $8,000 of repairs on products in part "a." You estimated that $5,000 of the repairs would occur in 2022. In 2022, you performed $4,800 of repairs on products from part "a." and $1,920 of repairs on products sold in 2022. On December 31, 2022, you estimated that repairs on products sold in 2021 would be an additional $3,500 and for products sold in 2022 would be an additional $9,000. You believe that $5,400 of the $9,000 of repairs would occur in 2023. II. III. Based upon the transaction above, determine the amount of current liabilities on December 31, 2021, and on December 31, 2022. What are the three criteria for making an entry to record a contingency at the end of the year