Exam 2- Take Home 6 Saved Required information Problem 11-4A (Algo) Estimating warranty expense and liability LO P4 [The following information applies to the questions displayed below.) 5 4.04 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 $60. The company expects warranty costs to equal 6% of dollar sales. The following transactions occurred. November 11 Sold 70 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 Novenber sales with an adjusting entry. Replaced 14 razors that were returned under the warranty. Sold 210 razors for $12,600 cash. Replaced 28 razors that were returned under the warranty. Recognized warranty expense related to December sales with an adjusting entry. Sold 140 razors for $8,400 cash. Replaced 33 razors that were returned under the warranty. Recognized warranty expense related to January sales with an adjusting entry. Problem 11-4A (Algo) Part 1 Required: 1. Prepare journal entries to record above transactions and adjustments. View transaction list Journal entry worksheet < 1 2 3 4 5 6 7 8 12 12 Help Save & Ex -Take Home Saved Required information Problem 11-4A (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 $60. The company expects warranty costs to equal 6% c dollar sales. The following transactions occurred. November 11 Sold 70 razors for $4,200 cash. November 30 Recognized warranty expense related to November sales with an adjusting entry. December 9 December 16 December 29 December 31 Replaced 14 razors that were returned under the warranty. Sold 210 razors for $12,600 cash. Replaced 28 razors that were returned under the warranty. Recognized warranty expense related to December sales with an adjusting entry. January 5 Sold 140 razors for $8,400 cash. January 17 Replaced 33 razors that were returned under the warranty. January 31 Recognized warranty expense related to January sales with an adjusting entry. Problem 11-4A (Algo) Part 2 2. How much warranty expense is reported for November and for December? Warranty expense for November Warranty expense for December 2- Take Home Saved Required information Problem 11-4A (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 $60. The company expects warranty costs to equal 6% of dollar sales. The following transactions occurred. November 11 November 30 December 9 December 16 December 29 December 31 January 5 January 17 January 31 Sold 70 razors for $4,200 cash. Recognized warranty expense related to November sales with an adjusting entry. Replaced 14 razors that were returned under the warranty. Sold 210 razors for $12,600 cash. Replaced 28 razors that were returned under the warranty.. Recognized warranty expense related to December sales with an adjusting entry, Sold 140 razors for $8,400 cash. Replaced 33 razors that were returned under the warranty. Recognized warranty expense related to January sales with an adjusting entry. Problem 11-4A (Algo) Part 3 3. How much warranty expense is reported for January? Warranty expense Help Required information. Problem 11-4A (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 $60. The company expects warranty costs to equal 6% of dollar sales. The following transactions occurred. November 11 Sold 70 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 14 razors that were returned under the warranty. Sold 210 razors for $12,600 cash. Replaced 28 razors that were returned under the warranty. Recognized warranty expense related to December sales with an adjusting entry. Sold 140 razors for $8,400 cash. Replaced 33 razors that were returned under the warranty. Recognized warranty expense related to January sales with an adjusting entry. Problem 11-4A (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 11-4A (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 $60. The company expects warranty costs to equal 6% of dollar sales. The following transactions occurred. November 11 Sold 70 razors for $4,200 cash. November 30 Recognized warranty expense related to November sales with an adjusting entry. Replaced 14 razors that were returned under the warranty. Sold 210 razors for $12,600 cash. December 9 December 16 December 29 December 31 January 5 Replaced 28 razors that were returned under the warranty. Recognized warranty expense related to December sales with an adjusting entry. Sold 140 razors for $8,400 cash. January 17 Replaced 33 razors that were returned under the warranty. January 31 Recognized warranty expense related to January sales with an adjusting entry. Problem 11-4A (Algo) Part 5 5. What is the balance of the Estimated Warranty Liability account as of January 31? Estimated warranty liability balanco