In 2017,Morton Co

Multiple Choice

In 2017,Morton Co.sold 100 hot air balloons at $4,000 each.The balloons carry a five-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 $42,000.$11,000 in claims was actually incurred during the year to honor their warranty.What was the balance of the estimated warranty liability at the end of the year?

A) $47,000
B) $42,000
C) $37,000
D) $5,000