Saran Digital, Inc. starts the year with $3,500 in its Estimated Warranty Payable account. During the year,

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Question:

Saran Digital, Inc. starts the year with $3,500 in its Estimated Warranty Payable account. During the year, there were $226,000 in sales and $5,000 in warranty repair payments. Saran Digital estimates warranty expense at 4% of sales. The Warranty Expense for the year is

A. $6,940.

B. $3,400.

C. $8,640.

D. 55,100.