Table 11-13 Arc Digital Starts the Year with Balances in Its Estimated

question 18

Multiple Choice

Table 11-13
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.
-Refer to Table 11-13. At the end of the year, what was the balance in the estimated warranty payable account?

• A)$2,850 debit
• B)$1,050 credit
• C)$3,200 debit
• D)$1,420 debit

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Definitions:

National Sales Tax

A tax levied on retail sales of goods and services at the national level, typically a percentage of the sales price.

Low-Income

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Positive Economics

The branch of economic study that focuses on objective analysis and descriptions of how economies work, without making value judgments.

Global Warming

The long-term rise in Earth's average temperature, primarily due to human activities like burning fossil fuels, which increases greenhouse gas levels in the atmosphere.