Arc Digital Starts the Year with Balances in Its Estimated

question 51

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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