Benitez Company had sales of $520,000 in Year 1. The company expects to incur warranty expenses amounting to 3% of sales. There were $12,300 of warranty obligations paid in cash during Year 1. Based on this information: a. Warranty expenses would decrease net earnings by $15,600 in 2016.
b. Cash would decrease by $12,300 as a result of the accounting events associated with warranties in 2016.
c. The warranties payable account would increase by $3,300 in 2016.
d. All of these answer choices are correct.