Beluga, Inc. sells football helmets to local schools and warrants all of its products for one year. While no helmets sold in 2021 have been returned yet, based upon previous years, Beluga, Inc. estimates that 3% of its products will need repairs or be replaced within the next year. What effect would this warranty have on assets, liabilities, and stockholders' equity in 2021? A. a decrease in assets and decrease in stockholders' equity B. No journal entry is necessary until products under warranty are returned. C. an increase in stockholders' equity and a decrease in liabilities D. a decrease in stockholders' equity and an increase in liabilities

Beluga, Inc. sells football helmets to local schools and warrants all of its products for one year. While no helmets sold in 2021 have been returned yet, based upon previous years, Beluga, Inc. estimates that 3% of its products will need repairs or be replaced within the next year. What effect would this warranty have on assets, liabilities, and stockholders' equity in 2021? A. a decrease in assets and decrease in stockholders' equity B. No journal entry is necessary until products under warranty are returned. C. an increase in stockholders' equity and a decrease in liabilities D. a decrease in stockholders' equity and an increase in liabilities

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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