Question
(part 1 options) Accounts payable Accounts receivable Bonus payable Cash Cost of goods sold Deferred income tax liability Employee benefits plan payable Employee bonus expense
(part 1 options)
Accounts payable
Accounts receivable
Bonus payable
Cash
Cost of goods sold
Deferred income tax liability
Employee benefits plan payable
Employee bonus expense
Employee federal income taxes payable
Employee life insurance payable
Employee medical insurance payable
Employee union dues payable
Estimated warranty liability
Federal unemployment taxes payable
FICAMedicare taxes payable
FICASocial security taxes payable
Income taxes expense
Income taxes payable
Interest expense
Interest payable
Interest receivable
Interest revenue
Merchandise inventory
Notes payable
Notes receivable
Parts inventory
Payroll taxes expense
Salaries expense
Salaries payable
Sales
Sales discounts
Sales returns and allowances
Sales taxes payable
Services revenue
State unemployment taxes payable
Ticket revenue
Unearned services revenue
Unearned ticket revenue
Vacation benefits expense
Vacation benefits payable
Warranty expense
Required information Problem 9-4A (Static) Estimating warranty expense and liability LO P4 [The following information applies to the questions displayed below.] 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 $20 and its retail selling price is $75. The company expects warranty costs to equal 8% of dollar sales. The following transactions occurred. November 11 Sold 105 razors for $7,875 cash. November 30 Recognized warranty expense related to November sales with an adjusting entry. December 9 Replaced 15 razors that were returned under the warranty. December 16 Sold 220 razors for $16,500 cash. December 29 Replaced 30 razors that were returned under the warranty. December 31 Recognized warranty expense related to December sales with an adjusting entry. January 5 Sold 150 razors for $11,250cash. January 17 Replaced 50 razors that were returned under the warranty. January 31 Recognized warranty expense related to January sales with an adjusting entry. Problem 9-4A (Static) Part 1 Required: 1. Prepare journal entries to record above transactions and adjustments. Journal entry worksheet Note: Enter debits before credits. 2. How much warranty expense is reported for November and for December? 3. How much warranty expense is reported for January? 4. What is the balance of the Estimated Warranty Liability account as of December 31? 5. What is the balance of the Estimated Warranty Liability account as of January 31Step by Step Solution
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