The beginning balance in the Warranty Payable account was $50,000. Sales were $900,000 and warranty costs were estimated at 7% of sales. During the year, $55,000 was paid to settle warranty claims. As a result of these transactions, what is the amount of warranty expense for the year and what is the ending balance in Warranty Payable?
Warranty Expense Warranty Payable
A) $50,000 $63,000
B) $63,000 $58,000
C) $55,000 $63,000
D) $113,000 $58,000