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  3. for each transaction below, write the net effect o

For each transaction below, write the net effect on Current Assets (CA), Current Liabilities (CL), Gross...

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Question

Accounting

For each transaction below, write the net effect on CurrentAssets (CA), Current Liabilities (CL), Gross Profit (GP), NetIncome Before Taxes (NIBT), and Cash flows from operatingactivities (CFO). Write 0 for no effect and use negative numbers toindicate reductions in accounts or cash outflows. Assume warrantyexpenses are recognized in COGS and bad debt expenses arerecognized in SG&A.

Transaction

CA

CL

GP

NI (pretax)

CFO

Recognize bad debt expense of $85

Write off $22 of Accounts Receivable

Recognize warranty expense of $35

Pay $15 to satisfy warranties previously accrued

Pay $200 for the next 4 months’ rent (not this month)

Recognize $50 of rent expense (previously paid)

Purchase $99 of inventory on account

Collect $72 of Accounts receivable

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