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 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 $15 and its retail selling price is $90. The company expects warranty costs to equal 7% of dollar sales. The following transactions occurred. Nov. 11 sold 60 razors for $5,400 canh. 30 Recognized warranty expense related to November sales with an adjusting entry. Dec. 9 Replaced 12 rators that were returned under the warranty. 16 Sold 180 razors for $16,200 cash. 29 Replaced 24 razors that were returned under the warranty. 31 Recognized warranty expense related to December sales with an adjusting entry. Jan. 5 Sold 120 razors for $10,000 cash. 17 Replaced 29 razors that were returned under the warranty. 31 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