The Clarion Company provides a one-year warranty on all merchandise it sells.In Year 1,the company recorded sales of $500,000.It estimated that the warranty costs on these sales would amount to $2,000.In July of Year 2,Clarion paid $250 to satisfy a warranty claim.Indicate whether each of the following statements is true or false.
________ a)Clarion's adjusting entry recording the warranty at the end of Year 1 decreased total assets and total stockholders' equity.
________ b)Clarion's adjusting entry recording the warranties at the end of Year 1 increased Clarion's total liabilities.
________ c)The entries,dated in July of Year 2,decreased total assets and net income for Year 2.
________ d)The entries,dated in July of Year 2,decreased Clarion's total liabilities.
________ e)The adjusting entry recorded at the end of Year 1 did not affect Clarion's revenue for the year.

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The Answer of The Clarion Company provides a one-year warranty on all merchandise it sells.In Year 1,the company recorded sales of $500,000.It estimated that the warranty costs on these sales would amount to $2,000.In July of Year 2,Clarion paid $250 to satisfy a warranty claim.Indicate whether each of the following statements is true or false.
________ a)Clarion's adjusting entry recording the warranty at the end of Year 1 decreased total assets and total stockholders' equity.
________ b)Clarion's adjusting entry recording the warranties at the end of Year 1 increased Clarion's total liabilities.
________ c)The entries,dated in July of Year 2,decreased total assets and net income for Year 2.
________ d)The entries,dated in July of Year 2,decreased Clarion's total liabilities.
________ e)The adjusting entry recorded at the end of Year 1 did not affect Clarion's revenue for the year.

The Clarion Company Provides a One-Year Warranty on All Merchandise