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Bike World offers warranties on all their bikes. They estimate warranty expense at 3.5% of...

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Accounting

Bike World offers warranties on all their bikes. They estimate warranty expense at 3.5% of sales. At the beginning of 2013, the Estimated Warranty Payable account had a credit balance of $1,200. During the year, Bike World had $295,000 of sales and had to pay out $5,300 in warranty payments. How much Warranty Expense will be reported on the 2013 income statement?

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