Arc Digital Starts the Year with Balances in Its Estimated

question 126

Multiple Choice

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

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Definitions:

Group Rates

Discounted pricing offered to members of a group when purchasing goods or services together, commonly found in hotel bookings or event tickets.

Flexible Benefit Plan

A Flexible Benefit Plan allows employees to choose from a range of benefits to create a package that best suits their personal needs and circumstances.

Topping Out

A construction industry term referring to the tradition of placing a tree or flag on top of a building when the last beam is installed.

Reward System

A set of mechanisms within an organization designed to recognize and reward employee performance and behavior.