Which of the following answers correctly shows the

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Intermediate Accounting: Reporting and Analysis
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Chapter 9 / Exercise E9-18
Intermediate Accounting: Reporting and Analysis
Jones/Wahlen
Expert Verified
Which of the following answers correctly shows the effect of the recognition of the warranty obligation at the end of Year 1 on the financial statements of Lucas? Assets = Liab. + Equity Revenue Expense = Net Inc. Cash flow A. NA = (700) + 700 700 NA = 700 NA B. (700) = NA + (700) NA 700 = (700) (700) OA C. (700) = (700) + NA NA NA = NA (700) OA D. NA = 700 + (700) NA 700 = (700) NA A) Choice A B) Choice B C) Choice C D) Choice D
5) Benitez Co. had sales of $800,000 in Year 1. The company expects to incur warranty expenses amounting to 3% of sales. There were $13,000 of warranty obligations paid in cash during Year 1. Based on this information:
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Intermediate Accounting: Reporting and Analysis
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Chapter 9 / Exercise E9-18
Intermediate Accounting: Reporting and Analysis
Jones/Wahlen
Expert Verified
6) The Platte Corporation issues a 5-year note payable on January 1, Year 1 for $5,000. The interest rate is 5% and the annual payment of $1,156, due each December 31, includes both interest and principal. Which of the following answers correctly shows the effect of the issuance of the note on Platte's financial statements? Assets = Liab. + Equity Revenue Expense = Net Inc. Cash flow

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