accounting 102

Benitez Company had sales of $660,000 in Year 1. The company expects to incur warranty expenses amounting to 4% of sales. There were $18,000 of warranty obligations paid in cash during Year 1. Based on this information: Multiple Choice Warranty expenses would decrease net earnings by $26,400 in Year 1. Cash would decrease by $18,000 as a result of the accounting events associated with warranties in Year 1 The warranties payable account would increase by $8.400 in Year 1 All of these answer choices are correct