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Question #2 In fiscal 2023, a manager increases reported earnings by $1.3 million by reducing the allowance for bad debt to $400,000 below the
Question #2 In fiscal 2023, a manager increases reported earnings by $1.3 million by reducing the allowance for bad debt to $400,000 below the expected amount and reducing the accrual for warranties to $900,000 below the expected amount. All else equal, discuss why these actions will lower earnings in fiscal 2024 by $1.3 million.
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