PLEASE DO ALL 5 PARTS!!!

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Problem 11-4A Warranty expense and liability estimation LO P4

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On October 29, 2016, Lobo Co. began operations by purchasing razors for resale. Lobo uses the perpetual inventory method. The razors have a 90-day warranty that requires the company to replace any nonworking razor. 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 $90 in both 2016 and 2017. The manufacturer has advised the company to expect warranty costs to equal 6% of dollar sales. The following transactions and events occurred. 2016

Nov.		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 180 razors for $16,200 cash.
		29		Replaced 24 razors that were returned under the warranty.
		31		Recognized warranty expense related to December sales with an adjusting entry.

2017

Jan.		5		Sold 120 razors for $10,800 cash.
		17		Replaced 29 razors that were returned under the warranty.
		31		Recognized warranty expense related to January sales with an adjusting entry.

Problem 11-4A Part 1

1.1 Prepare journal entries to record above transactions and adjustments for 2016.

1.2 Prepare journal entries to record above transactions and adjustments for 2017.

Problem 11-4A Part 2

2. How much warranty expense is reported for November 2016 and for December 2016?

Problem 11-4A Part 3

3. How much warranty expense is reported for January 2017?

Problem 11-4A Part 4

4. What is the balance of the Estimated Warranty Liability account as of December 31, 2016?

Problem 11-4A Part 5

5. What is the balance of the Estimated Warranty Liability account as of January 31, 2017?