hitzu co. sold a copier (that costs $4,500) for $9,000 cash with a two-year parts warranty to a customer on august 16 of year 1. hitzu expects warranty costs to be 4% 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 $109 for materials taken from the repair parts inventory. these are the only repairs required in year 2 for this copier.
