Which of the Following Answers Indicates the Effect of the February

When do the effects of product warranties appear on the statement of cash flows? A)When the sale of merchandise is made. B)When the warranty obligation is recognized. C)When there is a settlement of a warranty claim made by a customer. D)None of these answer choices are correct.

Benitez Co.had sales of $800,000 in 2016.The company expects to incur warranty expenses amounting to 3% of sales.There were $13,000 of warranty obligations paid in cash during 2016.Based on this information: A)Warranty expenses would decrease net earnings by $24,000 in 2016. B)Cash would decrease by $13,000 as a result of the accounting events associated with warranties in 2016. C)The warranties payable account would increase by $11,000 in 2016. D)All of these answer choices are correct.