QUESTION 22 A sales of om is in effect for a company. The company sets a product on crede. The before tax price of the product is $35.000. The company records both the sales tax and the sales amount in the sales account at the time of sale. Which of the following are correct if the required dusting entry is skipped? Equity is understated by $2.100 abilities are understated by 32.100 Assets are understated by 337.100 wuty is overstated by $2,100 Me are overstated by $2.100 Assets are overstated by $57.100 O and and O and and QUESTION 23 Use the information below for the next three questions During 2014. Dre Company introduced a new line of machines that carry a three year warranty against manufacturer's defects. Based on industry experience, warranty costs we estimated at 1 of sales in the year of sale, in the year after sale, and in the second year after sale. Sales and actual warranty expenditures for the free year period were as follows: Sales Actual Warranty Expenditus 2014 $ 8,000,000 $ 210,000 2015 7,000,000 350,000 2016 6,500,000 490,000 Asturing that actual warranty expenditures are recorded as incurred throughout the year, the adjusting entry Diego should make on December 31, 2014: reduces taxable income by $80.000 reduces taxable income by $130.000 increases totalities by 5430.000 increases totalities by $150.000