Required Information Problem 11-4A Warranty expense and liability estimation LO P4 [The following information applies to the questions displayed below.] On October 29, 2016, Lobo Co. began operations by purchasing razors for resale. Lobo uses the perpetual Inventory method. The razors have a 90-day warranty that requires the company to replace any nonworking razor, 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 $80 in both 2016 and 2017. The manufacturer has advised the company to expect warranty costs to equal 8% of dollar sales. The following transactions and events occurred. 2016 Nov. 11 Sold 60 razors for $4,800 cash. Dec. 30 Recognized varranty expense related to Novenber sales with an adjusting ent 9 Replaced 12 razors that were returned under the warranty. 16 Sold 180 razors for $14,400 cash. 29 Replaced 24 razors that were returned under the warranty. 31 Recognized warranty expense related to December sales with an adjusting entry 2017 Jan. 5 Sold 120 razors for $9,600 cash. 17 Replaced 29 razors that were returned under the warranty. 31 Recognized varranty expense related to January sales vith an adjusting entry. Problem 11-4A Part 2 2. How much warranty expense is reported for November 2016 and for December 2016? Warranty expense for November 2016 Warranty expense for December 2016 C Prev 7 89 10 of 10 Next > Required Information Problem 11-4A Warranty expense and liability estimation LO P4 [The following information applies to the questions displayed below.) On October 29, 2016, Lobo Co. began operations by method. The razors have a 90-day warranty that requires the company to replace any nonworking razor returned, the company discards it and mails a new one from Merchandise Inventory to the customer. The company's per new razor is $15 and its retail selling price is $80 in both 2016 and 2017. The manufacturer has advised the company to expect warranty costs to equal 8% of dollar sales. The following transactions and events occurred. purchasing razors for resale. Lobo uses the perpetual Inventory When a razor ls 2016 Nov. 11 Sold 60 razors for $4,800 cash. 30 Recognized varranty expense related to November s sales with an adjusting entry Dec. 9 Replaced 12 razors that were returned under the warranty 16 Sold 180 razors for $14,400 cash. 29 Replaced 24 razors that were returned under the varranty. 31 Recognized warranty expense related to December sales with an adjusting entry. 2017 Jan. 5 Sold 120 razors for $9,600 cash. 17 Replaced 29 razors that were returned under the varranty. 31 Recognized warranty expense related to January sales with an adjusting entry. Problem 11-4A Part 3 3. How much warranty expense is reported for January 2017? Required Information Problem 11-4A Warranty expense and liability estimation LO P4 The following information applies to the questions displayed below.] of 5 On October 29, 2016, Lobo Co. began operations by purchasing razors for resale. Lobo uses the perpetual inventory razors have a 90-day warranty that requires the company to replace any nonworking razor. 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 $80 in both 2016 and 2017. The manufacturer has advised the company to expect warranty costs to equal 8% of dollar sales. The following transactions and events occurred. ook 2016 Nov. 11 Sold 60 razors for $4,800 cash. rint 30 Recognized varranty expense related to November sales with an adjusting entry. Dec. 9 Replaced 12 razors that were returned under the warranty. 16 Sold 180 razors for $14,400 cash. 29 Replaced 24 razors that were returned under the warranty 31 Recognized warranty expense related to December aales with an adjusting entry rences 2017 Jan. 5 Sold 120 razors for $9,600 cash. 17 Replaced 29 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, 2016? ted warranty liability balance 0 Required Information Problem 11-4A Warranty expense and liability estimation LO P4 [The following information applies to the questions displayed below. On October 29, 2016, Lobo Co. began operations by purchasing razors for resale. Lobo uses the perpetual inventory method. The razors have a 90-day warranty that requires the company to replace any nonworking razor. When a razor ls 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 $80 in both 2016 and 2017. The manufacturer has advised the company to expect warranty costs to equal 8% of dollar sales. The following transactions and events occurred. 2016 Nov. 11 Sold 60 razors for $4,800 cash. 30 Recognized warranty expense related to November sales with an adjusting entry Dec. 9 Replaced 12 razors that vere returned under the warranty 16 Sold 180 razors for $14,400 cash. 29 Replaced 24 razors that were returned under the warranty. 31 Recognized warranty expense related to December s ales with an adjusting entry es 2017 Jan. 5 Sold 120 razors for $9,600 cash. 17 Replaced 29 razors that were returned under the warranty. 31 Recognized varranty expense related to January sales with an adjuating entry Problem 11-4A Part 5 5. What is the balance of the Estimated Warranty Liability account as of January 31, 2017? timated warranty liability balance