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 $13 and its retail selling price is $80. The company expects warranty costs to equal 7% of dollar sales. The following transactions occurred. Nov. 11 Sold 80 razors for $6,400 cash. 30 Recognized warranty expense related to November sales with an adjusting entry. Dec. 9 Replaced 16 rators that were returned under the warranty. 16 Sold 240 rators for $19,200 cash. 29 Replaced 32 razors that were returned under the warranty. 31 Recognized warranty expense related to December sales with an adjusting entry. 5 Sold 160 rators for $12,000 cash. 17 Replaced 37 razors that were returned under the warranty. 31 Recognized warranty expense related to January sales with an adjusting entry. Book Print Problem 11-4A Part 1 References 1. Prepare journal entries to record above transactions and adjustments Vww transaction list Journal entry worksheet 5 ***** 2 1 2 Record the sales revenue of so razors for 16.400 cash 10 JULU 20 TOLU > TUI 11,400 LOST. 29 Replaced 32 razors that were returned under the warranty. 31 Recognized warranty expense related to December sales with an adjusting entry. Jan. 5 Sold 160 razors for $12,800 cash. 17 Replaced 37 razors that were returned under the warranty. 31 Recognized warranty expense related to January sales with an adjusting entry. Problem 11-4A Part 1 1. Prepare journal entries to record above transactions and adjustments. View transaction list X 1 12 Record the sales revenue of 80 razors for $6,400 cash. rences 2 Record the cost of goods sold for 80 razors, 3 Record the estimated warranty expense at 7% of November sales 4 Record the replacement of 16 razors that were returned under the warranty. Credit 5 Record the sales revenue of 240 razors for $19,200 cash 6 Record the cost of goods sold for 240 razors. 7 Record the replacement of 32 razors that were returned Note: - Journal entry has been entered Clear entry View general journal Record entry 10 JULU 201OLO > TUI 113,200 LOSI. 29 Replaced 32 razors that were returned under the warranty. 31 Recognized warranty expense related to December sales with an adjusting entry. Jan. 5 Sold 160 razors for $12,800 cash. 17 Replaced 37 razors that were returned under the warranty. 31 Recognized warranty expense related to January sales with an adjusting entry. Problem 11-4A Part 1 1. Prepare journal entries to record above transactions and adjustments. View transaction list X 1 12 Record the sales revenue of 80 razors for $6,400 cash. rences 2 Record the cost of goods sold for 80 razors. 3 Record the estimated warranty expense at 7% of November sales 4 Record the replacement of 16 razors that were returned under the warranty. Credit 5 Record the sales revenue of 240 razors for $19,200 cash 6 Record the cost of goods sold for 240 razors. 7 Record the replacement of 32 razors that were returned Note: journal entry has been entered Clear entry View general journal Record entry 1. Prepare journal entries to record above transactions and adjustments. View transaction list X: x 12 7 Record the replacement of 32 razors that were returned under the warranty. ences 8 Record the estimated warranty expense at 7% of December sales, 9 Record the sales revenue of 160 razors for $12,800 cash. 10 Record the cost of goods sold for 160 razors. Credit 11 Record the replacement of 37 razors that were returned under the warranty. 12 Record the adjusting entry for warranty expense for the month of January. he han entered 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 $13 and its retail selling price is $80. The company expects warranty costs to equal 7% of dollar sales. The following transactions occurred. Nov. 11 Sold 80 razors for 56,480 cash. 30 Recognized warranty expense related to November sales with an adjusting entry. 9 Replaced 16 razors that were returned under the warranty 16 Sold 240 razors for $19,200 cash. 29 Replaced 32 razors that were returned under the warranty. 31 Recognized warranty expense related to December sales with an adjusting entry. Jan. 5 Sold 160 razors for $12,800 cash. 17 Replaced 37 razors that were returned under the warranty. 31 Recognized warranty expense related to January sales with an adjusting entry. Dec. Problem 11-4A Part 2 2. How much warranty expense is reported for November and December? Warranty expense for November Warranty expense for December 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 $13 and its retail selling price is $BO The company expects warranty costs to equal 7% of dollar sales. The following transactions occurred. Nov. 11 Sold Be razors for $6,400 cash. 30 Recognized warranty expense related to Novenber sales with an adjusting entry. 9 Replaced 16 razors that were returned under the warranty. 16 Sold 240 razors for $19,200 cash. 29 Replaced 32 razors that were returned under the warranty. 31 Recognized warranty expense related to December sales with an adjusting entry, Jan. 5 Sold 160 razors for $12,800 cash. 17 Replaced 37 razors that were returned under the warranty 31 Recognized warranty expense related to January sales with an adjusting entry. Dec. Problem 11-4A Part 3 3. How much warranty expense is reported for January? Warranty expense 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 $13 and its retail selling price is $80. The company expects warranty costs to equal 7% of dollar sales. The following transactions occurred. Nov. 11 Sold 80 rators for $6,400 cash. 30 Recognized warranty expense related to November sales with an adjusting entry. Dec. 9 Replaced 16 razors that were returned under the warranty. 16 Sold 240 razors for $19,200 cash 29 Replaced 32 razors that were returned under the warranty 31 Recognized warranty expense related to December sales with an adjusting entry. Jan. 5 Sold 160 razors for $12,500 cash. 17 Replaced 37 razors that were returned under the warranty, 31 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? Estimated warranty liability balance 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 513 and its retail selling price is $80. The company expects warranty costs to equal 7% of dollar sales. The following transactions occurred. Nov. 11 Sold 80 razors for $6,400 cash. 30 Recognized warranty expense related to November sales with an adjusting entry. Dec. 9 Replaced 16 razors that were returned under the warranty. 16 Sold 240 razors for $19,200 cash. 29 Replaced 32 razors that were returned under the warranty. 31 Recognized warranty expense related to December sales with an adjusting entry. 5 Sold 160 razors for $12,800 cash. 17 Replaced 37 razors that were returned under the warranty. 31 Recognized warranty expense related to January sales with an adjusting entry, Jan. Problem 11-4A Part 5 5. What is the balance of the Estimated Warranty Liability account as of January 312 Estimated warranty liability balance