Arc Digital starts the year with balances in its Estimated warranty payable account and Warranty expense account as shown below.During the year,there were $190,000 of sales and $3,200 of warranty repair payments.Arc Digital estimates warranty expense at 1.5% of sales.
- At the end of the year,what was the balance in the Warranty expense account?
A) $2,850 debit
B) $1,250 credit
C) $3,200 debit
D) $1,420 debit

Question

Arc Digital starts the year with balances in its Estimated warranty payable account and Warranty expense account as shown below.During the year,there were $190,000 of sales and $3,200 of warranty repair payments.Arc Digital estimates warranty expense at 1.5% of sales. 
- At the end of the year,what was the balance in the Warranty expense account?
A) $2,850 debit 
B) $1,250 credit 
C) $3,200 debit 
D) $1,420 debit

Quizplus · Accepted Answer

A) Calculations: $190,000 × 1.5% = $2,850

Arc Digital Starts the Year with Balances in Its Estimated