ACCTG 111 Chapter 11 Hmwrk B #5

k B Problems (algol Required information Problem 114A Warranty expense and liability estimation LO P4 The ollowing information apylies to the questions displayed below On October 29, 2016, Lobo Co began operations by purchasing razors for resale Lobo uses the perpetual inventory method. The rarors have a 90 day warranty that requires the company to replace any nonworking raror When a razor is seturned, the company dscards iRt and mals a new one from Merchandse Inventory to the customer. The company's cost per new razor is $13 and its retail seling price is $90 in both 205 and 2017 The manufacturer thas advised the company to expect warranty costs to equal 7% of dollar sales The Solowng transactons and events occurred 2016 Now. 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 188 razors for $16,200 cash 29 Replaced 24 razors that were returned under the warranty 31 Recopnized varranty expense related to December sales with an adjust ing entry 2017 Jan. 5 Sold 120 razors for $10,800 cash. 17 Replaced 29 razors that were returned under the warranty 31 Recognized varranty expense related to 3anary sales with an adjusting entry. roblem 11-4A Part 3 How much warranty expense is reported for January 2017? YU On October 29, 2016, Lobo Co began operations by purchasing razors for resale Lobo method. The razors have a 90-day warranty that requires the company to replace any ne returned, the company discards it and mails a new one from Merchandise Inventory to per new razor is $13 and is retal selling price is $90 in both 2016 and 2017. The manufa to expect warranty costs to equal 7% of dollar sales The following transactors and even t 3 of5 2016 Nov. 11 Sold 60 razors for $5,480 cash 38 Recognized warranty expense related to November sales with ana Dec. 9 Replaced 12 razors that were returned under the warranty 16 Sold 180 razors for $16,288 cash 29 Replaced 24 razors that were returned under the warranty 31 Recognized warranty expense related to December sales with an a 2017 Jan. 5 Sold 128 razors for $18,88e cash. 17 Replaced 29 razors that were returned under the warranty. 31 Recognized warranty expense related to January sales with an adj Problem 11-4A Part 3 3. How much warranty expense is reported for January 2017 K Prev 577Nex pe here to search S4