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Japan JJJ Inc. manufacturers advanced striking bags. It offers a two-year warranty standard. In Year 1, Japan JJJ Inc. sold 700,000 bags and in year

Japan JJJ Inc. manufacturers advanced striking bags. It offers a two-year warranty standard. In Year 1, Japan JJJ Inc. sold 700,000 bags and in year two it sold 500,000 bags. Past experience has told Japan JJJ Inc. that approximately 3 percent of the bags require repair at an average cost of $20 each. During Year 1, Japan JJJ Inc. actually spends $360,000 and during Year 2, Japan JJJ Inc. actually spends $325,000. What is the balance in the warranty liability account at the end of year 2?

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