In December Year 1, Lucas Corporation sold merchandise for $10,000 cash. Lucas estimated that the warranty obligation relating to this sale is $700. On February 12, Year 2, Lucas paid cash of $550 to settle a related warranty claim by this customer.Which of the following reflects the effect of the year-end adjustment to record estimated warranty expense?

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The Answer of In December Year 1, Lucas Corporation sold merchandise for $10,000 cash. Lucas estimated that the warranty obligation relating to this sale is $700. On February 12, Year 2, Lucas paid cash of $550 to settle a related warranty claim by this customer.Which of the following reflects the effect of the year-end adjustment to record estimated warranty expense?

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