Arc Digital starts the year with balances in its Estimated warranty payable account (1400 credit )and Warranty expense ( zero balance). During the year, there were $190,000 of sales and $3,200 of warranty repair payments. Arc Digital estimates warranty expense at 1.5% of sales.

Calculate warranty expense of the year.

Journalize necessary transactions.

Calculate ending balance of warranty payable and show it on the T-account.

Show all of your calculations.