What was the balance in the warranty liability account

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Question - Wally's Party Warehouse provides wholesale party equipment and materials to Party Shops. In 2013, Wally's Party sold 30 bounce houses at $30,000 each. The bounce houses carry a three-year warranty for defects. Wally estimates that repair costs will average 2% of the total selling price. The estimated warranty liability at the beginning of the year was $26,000. Claims of $19,000 were actually incurred during the year to honour warranties.

Required: What was the balance in the Warranty Liability account at the end of the year?

Reference no: EM131730164

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