Product Warranty Expense help?

[John_Pieko]

Ford Motor Company disclosed estimated product warranty payable for 2008 and 2007 as follows:

December 31, 2007 (in millions) = $4,862 Product Warranty Payable
December 31, 2008 (in millions) = $3,840 Product Warranty Payable

Ford's sales were $154,379 million in 2007 and decreased to $129,166 million in 2008. Assume that the total paid on warranty claims during 2008 was $3,076 million.

a. Illustrate the effects on the accounts and financial statements for the 2008 product warranty expense.

P.S. I just need to know on a balance sheet what the liabilities + Shareholders' Equity would be as well as the income Statement.

b. Assuming $3,076 million in warranty claims paid during 2008, explain the $1,022 million decrease in the total warranty liability from 2007 to 2008.