White Hat Digital, Inc starts the year with a credit balance of $3,500 in its Estimated Warranty Payable account
During the year, there were $224,000 in sales and $4,800 in warranty repair payments. White Hat Digital estimates warranty expense at 2% of sales. At the end of the year, what is the balance in the Estimated Warranty Payable account?
A) $4,480 debit
B) $4,800 credit
C) $3,500 debit
D) $3,180 credit
D .Opening Balance of Estimated Warranty Payable $3,500
Add: Warranty Expense 4,480
Less: Warranty Repairs 4,800
Closing Balance of Estimated Warranty Payable $3,180
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A) $5,000
B) $10,000
C) $15,000
D) $20,000
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