In December Year 1, Lucas Corporation sold merchandise for $10,000 cash. Lucas estimated that $700 of warranty claims might be filed in regard to these sales. On February 12, Year 2, warranty work amounting to $550 was performed for one of the customers ($430 labor paid in cash and $120 from the materials inventory).

Which of the following answers indicates the effect of the February 12, Year 2 transaction on the financial statements of Lucas Corporation?

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A. B. C. D. Assets (430) (550) (550) (550) = Llab. (550) + (120) ΝΑ = (550) + (550) NA + Equity Revenue ΝΑ + ΝΑ (550) ΝΑ ΝΑ NA Expense 120 ΝΑ 550 550 11 = = = Net Inc. (120) NA (550) (550) Cash flow (430) OA (430) OA (430) FA (430) OA A. B. C. D. Assets (430) (550) (550) (550) = Llab. (550) + (120) ΝΑ = (550) + (550) NA + Equity Revenue ΝΑ + ΝΑ (550) ΝΑ ΝΑ NA Expense 120 ΝΑ 550 550 11 = = = Net Inc. (120) NA (550) (550) Cash flow (430) OA (430) OA (430) FA (430) OA

Answer rating: 100% (QA)

B 550 NA NA NA NA 430 OA On 12th February following transition would have happened Warranty Provisio... View the full answer