In December year one, Lukas Corporation sold merchandise for 10,000 cash. Lukas estimated that $700 of warranty claims might be filed in regard to the sales. On February 12, year two, 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 your one on the financial statements of Lukas?

+ Which of the following answers correctly shows the effect of the recognition of the warranty obligation at the end of Year 1 on the Lucas? Assets = Liab. + Equity Revenue - Expense = Net Inc. Cash flow NA (700) + 700 700 NA 700 NA (700) NA + (700) NA 700 (700) (700) OA C. (700) (700) + NA NA NA NA (700) OA NA 700 + (700) NA 700 (700) NA Multiple Choice Choice A Choice B Choice C O Choice D