Question 1

In 2022, Jammer Jumps sold 100 bounce houses at $3,400 each. The bounce houses carry a five-year warranty for defects. Jammer estimates that repair costs will average 4% of the total selling price. The estimated warranty liability at the beginning of the year was $42,000. Claims of $11,000 were actually incurred during the year to honour warranties.

Required:

What was the ending balance in the warranty liability at the end of 2022? $______________