Warranties}

Wally's Party Warehouse provides wholesale party equipment and materials to Party Shops. In 2018, Wally's Party sold 30 bounce houses at \(\$ 30,000\) each. The bounce houses carry a threeyear 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.

\section*{Required: \(\square\)}

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

\section*{Brief Exercise