Problem 11-4A Estimating warranty expense and liability L0 P4 [The following information applies to the questions displayed below. ] On October 29, Lobo Co. began operations by purchasing razors for resale. The razors have a 90day 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 $14 and its retail selling price is $70. The company expects warranty costs to equal 6% of dollar sales. The following transactions occurred. NOV. 11 30 Dec . 9 16 29 31 Jan . 5 17 31 Sold 70 razors for $4,900 cash. Recognized warranty expense related to November sales with an adjusting entry. Replaced 14 razors that were returned under the warranty. Sold 210 razors for $14,700 cash. Replaced 28 razors that were returned under the warranty. Recognized warranty expense related to December sales with an adjusting entry. Sold 140 razors for $9,800 cash. Replaced 33 razors that were returned under the warranty. Recognized warranty expense related to January sales with an adjusting entry. Problem 11-4A Part1 1. Prepare journal entries to record above transactions and adjustments. View transaction list Journal entry worksheet Journal entry worksheet Record the sales revenue of 70 razors for $4,900 cash. Note: Enter debits before credits. Record entry Clear entry View general journal Journal entry worksheet Record the cost of goods sold for 70 razors. Note: Enter debits before credits. Record entry Clear entry View general journal Journal entry worksheet Record the estimated warranty expense at 6% of November sales. Note: Enter debits before credits. Record entry Clear entry View general journal Journal entry worksheet Record the replacement of 14 razors that were returned under the warranty. Note: Enter debits before credits. Record entry Clear entry View general journal Journal entry worksheet Record the sales revenue of 210 razors for $14,700 cash. Note: Enter debits before credits. Record entry Clear entry View general journal Journal entry worksheet Record the cost of goods sold for 210 razors. Note: Enter debits before credits. Record entry Clear entry View general journal Journal entry worksheet Record the replacement of 28 razors that were returned under the warranty. Note: Enter debits before credits. Record entry Clear entry View general journal Journal entry worksheet Record the estimated warranty expense at 6% of December sales. Note: Enter debits before credits. Record entry Clear entry View general journal Journal entry worksheet Record the sales revenue of 140 razors for $9,800 cash. Note: Enter debits before credits. Record entry Clear entry View general journal Journal entry worksheet ( 1 5 6 7 8 9 10 12 > Record the cost of goods sold for 140 razors. Note: Enter debits before credits. Record entry Clear entry View general journal Journal entry worksheet Record the replacement of 33 razors that were returned under the warranty. Note: Enter debits before credits. Record entry Clear entry View general journal Journal entry worksheet Record the adjusting entry for warranty expense for the month of January. Note: Enter debits before credits. Record entry Clear entry View general journal Problem 11-4A Estimating warranty expense and liability L0 P4 [The following information applies to the questions displayed below. ] On October 29, Lobo Co. began operations by purchasing razors for resale. The razors have a 90day 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 $14 and its retail selling price is $70. The company expects warranty costs to equal 6% of dollar sales. The following transactions occurred. NOV. 11 30 DEC. 9 16 29 31 Jan. 5 17 31 Sold 70 razors for $4,900 cash. Recognized warranty expense related to November sales with an adjusting entry. Replaced 14 razors that were returned under the warranty. Sold 210 razors for $14,700 cash. Replaced 28 razors that were returned under the warranty. Recognized warranty expense related to December sales with an adjusting entry. Sold 140 razors for $9,800 cash. Replaced 33 razors that were returned under the warranty. Recognized warranty expense related to January sales with an adjusting entry. Problem 11-4A Part 2 2. How much warranty expense is reported for November and December? Warranty expense for November - Warranty expense for December - Problem 11-4A Estimating warranty expense and liability LO P4 [The following information appiies to the questions displayed below. J On October 29, Lobo Co. began operations by purchasing razors for resale. The razors have a 90day 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 $14 and its retail selling price is $70. The company expects warranty costs to equal 6% of dollar sales. The following transactions occurred. NOV. 11 30 Dec . 9 16 29 31 Jan . 5 17 31 Sold 70 razors for $4,900 cash. Recognized warranty expense related to November sales with an adjusting entry. Replaced 14 razors that were returned under the warranty. Sold 210 razors for $14,700 cash. Replaced 28 razors that were returned under the warranty. Recognized warranty expense related to December sales with an adjusting entry. Sold 140 razors for $9,800 cash. Replaced 33 razors that were returned under the warranty. Recognized warranty expense related to January sales with an adjusting entry. Problem 11-4A Part 3 3. How much warranty expense is reported for January? Problem 11-4A Estimating warranty expense and liability LO P4 [The following information applies to the questions displayed below. ] On October 29, Lobo Co. began operations by purchasing razors for resale. The razors have a 90day 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 $14 and its retail selling price is $70. The company expects warranty costs to equal 6% of dollar sales. The following transactions occurred. NOV. 11 30 Dec . 9 16 29 31 Jan . 5 17 31 Sold 70 razors for $4,900 cash. Recognized warranty expense related to November sales with an adjusting entry. Replaced 14 razors that were returned under the warranty. Sold 210 razors for $14,700 cash. Replaced 28 razors that were returned under the warranty. Recognized warranty expense related to December sales with an adjusting entry. Sold 140 razors for $9,800 cash. Replaced 33 razors that were returned under the warranty. Recognized warranty expense related to January sales with an adjusting entry. Problem 11-4A Part 4 4. What is the balance of the Estimated Warranty Liability account as of December 31? Required information Problem 11-4A Estimating warranty expense and liability L0 P4 [The following information applies to the questions displayed below. J On October 29, Lobo Co. began operations by purchasing razors for resale. The razors have a 90day 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 $14 and its retail selling price is $70. The company expects warranty costs to equal 6% of dollar sales. The following transactions occurred. NOV. 11 30 Dec . 9 16 29 31 Jan . 5 17 31 Sold 70 razors for $4,900 cash. Recognized warranty expense related to November sales with an adjusting entry. Replaced 14 razors that were returned under the warranty. Sold 210 razors for $14,700 cash. Replaced 28 razors that were returned under the warranty. Recognized warranty expense related to December sales with an adjusting entry. Sold 140 razors for $9,800 cash. Replaced 33 razors that were returned under the warranty. Recognized warranty expense related to January sales with an adjusting entry. Problem 11-4A Part 5 5. What is the balance of the Estimated Warranty Liability account as of January 31