QUESTION 5 1. Prospect Company began operations on May 1, 2017, and experienced the following events during the year: Purchased $80,000 of merchandise inventory for cash defects for one year following the date of sale Estimated future warranty liability of $1,200 (1% of sales 2 Sold all the merchandise for $120,000 cash and guaranteed the merchandise sold to be free from 5 Paid $800 cash to repair defective merchandise returned by a customer What is Prospect Company's net income for 2017? a. $13,000 b$13,800 c. $14,600 d-$93,800 1 points QUESTION 6 cl llauing stotoments is an incorrect statement