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 correctly shows the effect of the recognition of the warranty obligation at the end of Year 1 on the financial statements of Lucas? Balance Sheet Income Statement Statement of Cash Flows Assets = Liabilities + Stockholders' Equity Revenue Expense = Net Income A. n/a (700) 700 700 n/a 700 n/a B. (700) n/a (700) n/a 700 (700) (700) OA C. (700) (700) n/a n/a n/a n/a (700) OA D. n/a 700 (700) n/a 700 (700)