Wally's Party Warehouse provides wholesale party equipment and materials to Party Shops. In 2019, Wally's Party sold 30 bounce houses at $30,000 each. The bounce houses carry a 3-year warranty for defects. Wally estimates that repair costs will average 2% of the total selling price.
The estimated warranty liability at the beginning of the year was $26,000. Claims of $19,000 were actually incurred during the year to honor warranties.
Required:
What was the balance in the Estimated Warranty Liability account at the end of the year?