Required Information Problem 9-4A (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 $14 and its retail selling price is $70. The company expects warranty costs to equal 5% of dollar sales. The following transactions occurred. November 11 Sold 60 razors for $4,200 cash. November 30 December 9 December 16 December 29 December 31 January 5 January 17 January 31 Recognized warranty expense related to November sales with an adjusting entry. Replaced 12 razors that were returned under the warranty. Sold 180 razors for $12,600 cash. Replaced 24 razors that were returned under the warranty. Recognized warranty expense related to December sales with an adjusting entry. Sold 120 razors for $8,400 cash. Replaced 29 razors that were returned under the warranty. Recognized warranty expense related to January sales with an adjusting entry. Problem 9-4A (Algo) Part 5 5. What is the balance of the Estimated Warranty Liability account as of January 31? Estimated warranty liability balance Required Information Problem 9-4A (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 $14 and its retail selling price is $70. The company expects warranty costs to equal 5% of dollar sales. The following transactions occurred. November 11 Sold 60 razors for $4,200 cash. November 30 December 9 December 16 December 29 December 31 January 5 January 17 January 31 Recognized warranty expense related to November sales with an adjusting entry. Replaced 12 razors that were returned under the warranty. Sold 180 razors for $12,600 cash. Replaced 24 razors that were returned under the warranty. Recognized warranty expense related to December sales with an adjusting entry. Sold 120 razors for $8,400 cash. Replaced 29 razors that were returned under the warranty. Recognized warranty expense related to January sales with an adjusting entry. Problem 9-4A (Algo) Part 4 4. What is the balance of the Estimated Warranty Liability account as of December 31? Estimated warranty liability balance Required Information Problem 9-4A (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 $14 and its retail selling price is $70. The company expects warranty costs to equal 5% of dollar sales. The following transactions occurred. November 11 Sold 60 razors for $4,200 cash. November 30 December 9 December 16 December 29 December 31 January 5 January 17 January 31 Recognized warranty expense related to November sales with an adjusting entry. Replaced 12 razors that were returned under the warranty. Sold 180 razors for $12,600 cash. Replaced 24 razors that were returned under the warranty. Recognized warranty expense related to December sales with an adjusting entry. Sold 120 razors for $8,400 cash. Replaced 29 razors that were returned under the warranty. Recognized warranty expense related to January sales with an adjusting entry. Problem 9-4A (Algo) Part 3 3. How much warranty expense is reported for January? Warranty expense