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On October 2 9 , Lobo Company began operations by purchasing razors for resale. The razors have a 9 0 - day warranty. When a
On October Lobo Company began operations by purchasing razors for resale. The razors have a 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 $ and its retail selling price is $ The company expects warranty costs to equal of dollar sales. The following transactions occurred.
November Sold razors for $ cash.
November Recognized warranty expense related to November sales with an adjusting entry.
December Replaced razors that were returned under the warranty.
December Sold razors for $ cash.
December Replaced razors that were returned under the warranty.
December Recognized warranty expense related to December sales with an adjusting entry.
January Sold razors for $ cash.
January Replaced razors that were returned under the warranty.
January Recognized warranty expense related to January sales with an adjusting entry.
How much warranty expense is reported for November and for December?
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