In $20$X$1,$ Murphy Corp. began a new product line with a $12-$month warranty against manufacturer defects.

Based on industry experience, Murphy expects warranty costs to be an amount equal to approximately $9\%$ of total sales dollars.

During $20$X$1,$ total sales were $$3,000,000.$ The costs incurred to satisfy warranty claims in $20$X$1$ were $$90,000.$

Required: Answer the following two questions assuming all required journal entries were properly made in $20$X$1.$

Question #$1$: What should Murphy report as the "Warranty Expense" balance on its $20$X$1$ income statement?

Answer: Answer $1$ Question $11$

Question #$2$: What should Murphy report as the "Warranty Liability" balance on its balance sheet at $12/31/$X$1?$