Cycle Haven, Inc offers warranties on all their bikes
They estimate warranty expense at 3.5% of sales. At the beginning of 2017, the Estimated Warranty Payable account had a credit balance of $1,400. During the year, Cycle Haven had $299,000 in sales and had to pay out $5,900 in warranty payments. How much Warranty Expense will be reported on the 2017 income statement?
A) $5,965
B) $7,300
C) $9,065
D) $10,465
D .Sales revenue $299,000
Rate of estimated warranty expense 3.5%
Warranty Expense to be reported $10,465
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