Hitzu co. sold a copier costing $4,800 with a two-year parts warranty to a customer on august 16, 2015, for $6,000 cash. hitzu uses the perpetual inventory system. on november 22, 2016, the copier requires on-site repairs that are completed the same day. the repairs cost $209 for materials taken from the repair parts inventory. these are the only repairs required in 2016 for this copier.
based on experience, hitzu expects to incur warranty costs equal to 4% of dollar sales. it records warranty expense with an adjusting entry at the end of each year.

required:

1. how much warranty expense does the company report in 2015 for this copier?
2. how much is the estimated warranty liability for this copier as of december 31, 2015?
3. how much warranty expense does the company report in 2016 for this copier?
4. how much is the estimated warranty liability for this copier as of december 31, 2016?
5. prepare journal entries to record (a) the copier's sale; (b) the adjustment on december 31, 2015, to recognize the warranty expense; and (c) the repairs that occur in november 2016.

Selected information about income statement accounts for the reed company is presented below (the company's fiscal year ends on december 31): 2018 2017sales $ 4,400,000 $ 3,500,000cost of goods sold 2,860,000 2,000,000administrative expenses 800,000 675,000selling expenses 360,000 312,000interest revenue 150,000 140,000interest expense 200,000 200,000loss on sale of assets of discontinued component 50,000 —on july 1, 2018, the company adopted a plan to discontinue a division that qualifies as a component of an entity as defined by gaap. the assets of the component were sold on september 30, 2018, for $50,000 less than their book value. results of operations for the component (included in the above account balances) were as follows: 1/1/18-9/30/18 2017 sales $ 400,000 $ 500,000 cost of goods sold (290,000 ) (320,000 )administrative expenses (50,000 ) (40,000 )selling expenses (20,000 ) (30,000 )operating income before taxes $ 40,000 $ 110,000 in addition to the account balances above, several events occurred during 2018 that have not yet been reflected in the above accounts: a fire caused $50,000 in uninsured damages to the main office building. the fire was considered to be an infrequent but not unusual event.inventory that had cost $40,000 had become obsolete because a competitor introduced a better product. the inventory was sold as scrap for $5,000.income taxes have not yet been recorded.required: prepare a multiple-step income statement for the reed company for 2018, showing 2017 information in comparative format, including income taxes computed at 40% and eps disclosures assuming 300,000 shares of common stock. (amounts to be deducted should be indicated with a minus sign. round eps answers to 2 decimal places.)