Saran Digital Inc.starts the year with $2,500 in its Estimated Warranty Payable account.During the year,there were $210,000 of sales and $4,500 of warranty repair payments.Saran Digital estimates warranty expense at 2% of sales.The journal entry to record this will include a debit to Warranty Expense for ________.
A)$4,200
B)$4,500
C)$2,500
D)$2,200

Question

Quizplus · Accepted Answer

The warranty expense is estimated at 2% of sales, which is 2% of $210,000, equaling $4,200.