Question 1 [30 points] On April 1, Velor Inc. began to buy and resell radios for $31 each. Velor Inc. uses the perpetual method to account for inventories. The radios are covered under a warranty that requires the company to replace any defective radio within 90 days. When a radio is returned, the company simply throws it away and mails a new one from inventory to the customer. The company's cost for a new radio is only $7. The manufacturer has advised the company to expect warranty costs to equal 15% of the units sold. Record the following transactions in the journal provided. Record transaction letters as descriptions. Enter the dates in the format dd/mmm (ie. 15/Jan). General Journal Account/Explanation Page Gj1 F Debit Credit Date a. April 5: Sold 380 radios for cash. b. April 30: The warranty expense for the month of April was recognized with an adjusting entry c. May 4 : 27 radios that were returned under Warranty were replaced. d. May 10: Sold 160 radios for cash. e. May 22 : Replaced 27 radios that were returned under the warranty. f. May 31 : Recognized warranty expense for May with an adjusting entry. VIIVIC VUUGI Date Account/Explanation I ay UVI F Debit Credit a. April 5: Sold 380 radios for cash. b. April 30 : The warranty expense for the month of April was recognized with an adjusting entry c. May 4: 27 radios that were returned under warranty were replaced. d. May 10: Sold 160 radios for cash. e. May 22 : Replaced 27 radios that were returned under the warranty. f. May 31 : Recognized warranty expense for May with an adjusting entry