Bike World offers warranties on all their bikes.They estimate warranty expense at 5.5% of sales.At the beginning of 2016,the Estimated warranty payable account had a credit balance of $2000.During the year,Bike World had $296,000 of sales,and had to pay out $5400 in warranty payments.How much Warranty expense will be reported on the 2016 income statement?

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The Answer of Bike World offers warranties on all their bikes.They estimate warranty expense at 5.5% of sales.At the beginning of 2016,the Estimated warranty payable account had a credit balance of $2000.During the year,Bike World had $296,000 of sales,and had to pay out $5400 in warranty payments.How much Warranty expense will be reported on the 2016 income statement?

Bike World Offers Warranties on All Their Bikes