Indicate How Each Event Affects the Elements of Financial Statements

question 31

Essay

Indicate how each event affects the elements of financial statements.Use the following letters to record your answer in the box shown below each element.You do not need to enter amounts.Enter only one letter for each element.

-Kelly Co.sells goods to customers with a three-year warranty.During 2015,Kirk sold $800,000 of goods.On December 31,2015,Kelly made the appropriate year-end adjustment to record the warranty expense related to the goods sold during the year.During 2016,Kelly paid $4,000 cash to satisfy warranty claims.Show the effects of the 2016 payments to satisfy warranty claims.

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Definitions:

U.S.

The United States, a federal republic in North America, composed of 50 states, a federal district, five major self-governing territories, and various possessions.

Worldwide

Extending across or relating to the entire world; global in scope.

Myths and Facts

A comparison or discussion aimed at distinguishing between widely held but false beliefs (myths) and verified truths (facts).

China

A country in East Asia, the world's most populous nation, with a rich history, culture, and one of the largest economies globally.