On October 29, Lobo Company 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 $70. The company expects warranty costs to equal 7% of dollar sales. The following transactions occurred.

November 11	Sold 60 razors for $4,200 cash.
November 30	Recognized warranty expense related to November sales with an adjusting entry.
December 9	Replaced 12 razors that were returned under the warranty.
December 16	Sold 180 razors for $12,600 cash.
December 29	Replaced 24 razors that were returned under the warranty.
December 31	Recognized warranty expense related to December sales with an adjusting entry.
January 5	Sold 120 razors for $8,400 cash.
January 17	Replaced 29 razors that were returned under the warranty.
January 31	Recognized warranty expense related to January sales with an adjusting entry.

Problem 9-4A (Algo) Part 1

Required:

Prepare journal entries to record above transactions and adjustments.

1. record the sales revenue of 60 razors for $4200 cash

2. record COGS sold for 60 razors

3. record the estimated warranty expense at 7% of november sales

4. record the replacement of 12 razors that were returned under warranty.

5. record the sales revenue of 180 razors for $12,600 cash

6. record the cost of goods sold for 180 razors

7.record the replacement of 24 razors that were returned under warranty.

8. record the estimated warranty expense at 7% of december sales

9. record the sales revenue of 120 razors for $8400 cash

10. record the COGS for 120 razors

11. record the replacement of 29 razors that returned under the warranty

12. record the adjusting entry for warrenty expense for the month of January.