Hitzu Co$.$ sold a copier $($that costs $$6,500)$ for $$13,000$ cash with a two$-$year parts warranty to a customer on August $16$ of Year $1.$ Hitzu

expects warranty costs to be $6\%$ of dollar sales. It records warranty expense with an adjusting entry on December $31$ On January $5$ of

Year $2,$ the copier requires on$-$site repairs that are completed the same day. The repairs cost $$114$ for materials taken from the repair

parts inventory. These are the only repairs required in Year $2$ for this copier.

How much warranty expense does the company report for this copier in Year $1?$

How much is the estimated warranty liability for this copier as of December of Year $1?$

Estimated warranty liability