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Bespoke, Inc. offers warranties on all their bikes. They estimate warranty expense at
44%
of sales. At the beginning of 2017, the Estimated Warranty Payable account had a credit balance of
$2,000.
During the year, Bespoke had
$296,000
in sales and had to pay out
$5,700
in warranty payments. At the end of the year, what is the closing balance in the Estimated Warranty Payable accounts?
A.
$11,840
B.
$8,140
C.
$9,840
D.
$7,700
Answer & Explanation
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