Marshall Repairs and Detailing has recently opened its doors to provide quality auto repair services. To encourage business, Marshall offers a $6-$month warranty on all repairs. The following data are available for the year:

Transmissions repaired

$5,700$

Expected frequency of warranty claims

$0\mathrm{.}03$ per repair

Actuail warranty claims

$$63,700$

Beginning balance for estimated warranty liability

$$50,700$

Estimated cost of each warranty claim

$$340$

Assume that warranty claims are paid in cash.

Required:

Compute the warranty expense for the year.

$

Prepare the entry to record the payment of the warranty claims for the year. If an amount box does not require an entry, leave it blank.

$($Record payment of claims$)$

Conceptual Connection: What is the balance in the estimated warranty liability account at December $31?$

$$

Why has the balance in the warranty liability account changed from the beginning of the year?

The balance has because more claims were than were through warranty expense.