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Required information Problem 1 1 - 4 A ( Algo ) Estimating warranty expense and liability LO P 4 [ The following information applies to

Required information
Problem 11-4A (Algo) 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 $15 and its retail selling price is $70. The company expects warranty costs to equal 7% of dollar sales. The following transactions occurred.
November 11 Sold 80 razors for $5,600 cash.
November 30 Recognized warranty expense related to November sales with an adjusting entry.
December 9 Replaced 16 razors that were returned under the warranty.
December 16 Sold 240 razors for $16,800 cash.
December 29 Replaced 32 razors that were returned under the warranty.
December 31 Recognized warranty expense related to December sales with an adjusting entry.
January 5 Sold 160 razors for $11,200 cash.
January 17 Replaced 37 razors that were returned under the warranty.
January 31 Recognized warranty expense related to January sales with an adjusting entry.
Problem 11-4A (Algo) Part 3
3. How much warranty expense is reported for January?
Warranty expense
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