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

---

Definitions:

Anxiety

An emotion of stress and anxiety caused by an event whose result is not yet known.

Personality Disorder

A class of mental disorders characterized by enduring maladaptive patterns of behavior, cognition, and inner experience.

Binge-Eating Disorder

An eating disorder characterized by recurrent episodes of eating large quantities of food quickly and to the point of discomfort.

Antisocial Personality Disorder

An enduring mental disorder marked by repetitive actions that manipulate, exploit, or abuse others' rights.