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Hitzu co. sold a copier costing $6,500 with a two-year parts warranty to a customer on august 16, 2017, for $13,000 cash. hitzu uses the perpetual inventory system. on november 22, 2018, the copier requires on-site repairs that are completed the same day. the repairs cost $94 for materials taken from the repair parts inventory. these are the only repairs required in 2018 for this copier. based on experience, hitzu expects to incur warranty costs equal to 5% of dollar sales. it records warranty expense with an adjusting entry at the end of each year.
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