In its first month of business, Fish Nets, Inc sold 8,000 nets ...

[tiara099]

In its first month of business, Fish Nets, Inc sold 8,000 nets with a three-month warranty for 10 each on account. Fish Nets estimates that 1 of its sales will be uncollectible and that warranty costs will be approximately 100 on its sales.
 
  Fish Nets' financial statements should include ________.
  A) Bad debts expense of 800 and Warranty expense of 100 on its income statement
  B) Allowance for uncollectible accounts of (80 ) and nothing for the warranties on its balance sheet
  C) Bad debts expense of 80 and Warranty expense of 100 on its income statement
  D) Allowance for uncollectible accounts of (80 ) and Unearned warranty of 100 on its balance sheet

Question 2

The amounts for sales returns and allowances, sales discounts, and net sales added together equal gross sales.
 a. True
   b. False
   Indicate whether the statement is true or false

[scottmt]

Answer to Question 1

A

Answer to Question 2

True

[tiara099]

Thank you

[scottmt]

No problemo