TB MC Qu. 7-73 (Static) In December Year 1, Lucas Corporation... 61 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). 2 points X 02:21:26 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? Skipped Balance Sheet Income Statement = + = A. B. C. D. Assets n/a (700) (700) Liabilities (700) n/a (700) 700 Stockholders' Equity 700 (700) n/a (700) Revenue 700 n/a n/a n/a Expense n/a 700 n/a Net Income 700 (700) n/a (700) Statement of Cash Flows n/a (700) OA (700) OA n/a n/a 700 Multiple Choice O Choice A O Choice B O O Choice C O O Choice D