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, Lucas paid cash of $550 to settle a related warranty claim by this customer.Which of the following answers indicates the effect of the February 12, Year 2 transaction on the financial statements of Lucas Corporation?

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The Answer of 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, Lucas paid cash of $550 to settle a related warranty claim by this customer.Which of the following answers indicates the effect of the February 12, Year 2 transaction on the financial statements of Lucas Corporation?

In December Year 1, Lucas Corporation Sold Merchandise for $10,000