Required information 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 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 $16 and its retail selling price is $70. The company expects warranty costs to equal 8% of dollar sales. The following transactions occurred. Nov. 11 Sold 60 razors for $4,200 cash. 30 Recognized warranty expense related to November sales with an adjusting entry. 9 Replaced 12 razors that were returned under the warranty. 16 Sold 180 razors for $12,600 cash. 29 Replaced 24 razors that were returned under the warranty. 31 Recognized warranty expense related to December sales with an adjusting entry. 5 Sold 120 razors for $8,400 cash. 17 Replaced 29 razors that were returned under the warranty. 31 Recognized warranty expense related to January sales with an adjusting entry. Dec. Jan. Problem 11-4A Part 1 1. Prepare journal entries to record above transactions and adjustments. 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 Part 3 3. How much warranty expense is reported for January? Warranty expense Problem 11-4A Part 4 4. What is the balance of the Estimated Warranty Liability account as of December 31? Estimated warranty liability balance Problem 11-4A Part 5 5. What is the balance of the Estimated Warranty Liability account as of January 31? Estimated warranty liability balance