In 2016, Morton Co

Multiple Choice

In 2016, Morton Co.sold 150 hot air balloons at $4,000 each.The balloons carry a 5-year warranty for defects.Morton estimates that repair costs will average 4% of the total selling price.The estimated warranty liability at the beginning of the year was $14,000.$20,000 in claims was actually incurred during the year to honor their warranty.What was the warranty expense for 2016?

A) $10,000
B) $18,000
C) $20,000
D) $24,000