Arc Digital Starts the Year with Balances in Its Estimated

question 144

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 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:

Transmission

The act or process of transferring something from one place, person, or thing to another, often used in the context of diseases or information.

HIV

Human Immunodeficiency Virus, a virus that attacks the immune system and can lead to AIDS if not treated.

Postdecision Dissonance

In the theory of cognitive dissonance, tension that occurs when you believe you may have made a bad decision.

Tension

A state of mental or emotional strain, stress, or conflict that can also refer to the physical stretching of an object or material.