Benitez Co. had sales of $620,000 in 2016. The company expects to incur warranty expenses amounting to

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Benitez Co. had sales of $620,000 in 2016. The company expects to incur warranty expenses amounting to 2% of sales. There were $8,400 of warranty obligations paid in cash during 2016. Based on this information:

1 Warranty expenses would decrease net earnings by $12,400 in 2016.

2 Cash would decrease by $8,400 as a result of the accounting events associated with warranties in 2016.

3 The warranties payable account would increase by $4,000 in 2016.

4 All of these answer choices are correct.

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Managerial Accounting

ISBN: 978-0133428377

4th edition

Authors: Karen W. Braun, Wendy M. Tietz

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Posted Date: Jan 15, 2021 01:38 PM

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Benitez Co. had sales of $620,000 in 2016. The company expects to incur warranty expenses amounting to

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Sales during the year 620000 Warrenty expenses 6200002 12400 An... View the full answer

Managerial Accounting

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