On October 29, 2010, Bram Co. began operations by purchasing razors for resale. Bram uses the perpetual
Question:
2010
Nov. 11 Sold 75 razors for $4,500 cash.
30 Recognized warranty expense related to November sales with an adjusting entry.
Dec. 9 Replaced 15 razors that were returned under the warranty.
16 Sold 210 razors for $12,600 cash.
29 Replaced 30 razors that were returned under the warranty.
31 Recognized warranty expense related to December sales with an adjusting entry.
2011
Jan. 5 Sold 130 razors for $7,800 cash.
17 Replaced 35 razors that were returned under the warranty.
31 Recognized warranty expense related to January sales with an adjusting entry.
Required
1. Prepare journal entries to record these transactions and adjustments for 2010 and 2011.
2. How much warranty expense is reported for November 2010 and for December 2010?
3. How much warranty expense is reported for January 2011?
4. What is the balance of the Estimated Warranty Liability account as of December 31, 2010?
5. What is the balance of the Estimated Warranty Liability account as of January 31, 2011?
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