Problem 9-4A (Algo) 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 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 $14 and its retail selling price is $80. The company expects warranty costs to equal 9% of dollar sales. The following transactions occurred. Nov. 11 Sold 70 razors for $5,600 cash. 30 Recognized warranty expense related to November sales with an adjusting entry. Dec. 9 Replaced 14 razors that were returned under the warranty. Jan. 16 Sold 210 razors for $16,800 cash. 29 Replaced 28 razors that were returned under the warranty. 31 Recognized warranty expense related to December sales with an adjusting entry. 5 Sold 140 razors for $11,200 cash. 17 Replaced 33 razors that were returned under the warranty. 31 Recognized warranty expense related to January sales with an adjusting entry. Problem 9-4A (Algo) Part 4 4. What is the balance of the Estimated Warranty Liability account as of December 31? Estimated warranty liability balance