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In December 2013, Lucky Corporation sold merchandise for $5,000 cash. Lucky estimated that $350 of warranty claims might be filed in regard to these sales. On February 12, 2014, warranty work amounting to $275 was performed for one of the customers ($215 labor paid in cash and $60 from the materials inventory).
1.Which of the following answers indicates the effect of the February 12, 2014 entry on the financial statements of Lucky Corporation?
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