TB TF Qu$.6-105($Static$)$ The Ernie Company acquired the Bert Company...

The Ernie Company acquired the Bert Company in January of Year $1.$ Bert's balance sheet included $$700,000$ of assets, $$250,000$ of liabilities and stockholders' equity of $$450,000.$ Ernie agrees to assume the liabilities and pay $$480,000$ to acquire Bert. An independent appraiser assessed the fair value of Bert's assets to be $$630,000.$ Indicate whether each of the following statements about this transaction is true or false.

$\backslash$table$[[],[$a$),$Ernie's entry to record the transaction includes a debit to the assets for $$700,000$

Indicate whether each of the following statements is true or false.

a$)$ The extension of a warranty on goods sold normally represents a legal liability to the seller.

b$)$ The recognition of the warranty obligation increases the Warranties Payable account and reduces the Revenue account.

c$)$ Providing repairs to customers under the terms of product warranties increase Warranties Expense and decrease the Warranties Payable account.

d$)$ Net income is not affected when warranty work is completed.

e$)$ Total assets are not affected by the recognition of the warranty obligation at the end of the period.