(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 31