5 07 of 5 14.06.07 Required information Problem 9.4A (Algo) Estimating warranty expense and liability LO P4 [The following information applies to the questions displayed below) On October 29, Lobo Co. began operations by purchasing razors for resale. The razors have a 90-day warranty. When a razor is returned the company discards it and mails a new one from Merchandise Inventory to the customer. The company's cost per new razor is $15 and its retail selling price is $90. The company expects warranty costs to equal 7% of dollar sales. The following transactions occurred. Nov. 11 Sold 60 razors for $5,400 cash. 30 Recognized warranty expense related to November sales with an adjusting entry. Dec. 9 Replaced 12 razors that were returned under the warranty. 16 Sold 180 razors for $16,200 cash. 29 Replaced 24 razors that returned under the warranty. 31 Recognized warranty expense related to December sales with an adjusting entry. Jan. 5 Sold 120 rators for $10,800 cash 17 Replaced 29 rators that were returned under the warranty. 31 Recognized warranty expense related to January sales with an adjusting entry. Book rences Problem 9.4A (Algo) Part 4 4. What is the balance of the Estimated Warranty Liability account as of December 317 Estimated warranty aboty balance