Question: Required information Problem 1 1 - 4 A ( Algo ) Estimating warranty expense and liability LO P 4 [ The following information applies to

Required information

Problem

11 - 4

(

Algo

)

Estimating warranty expense and liability LO P

4

[

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 $

15

and its retail selling price is $

90 .

The company expects warranty costs to equal

6 %

of dollar sales. The following transactions occurred.Problem

11 - 4

(

Algo

)

Part

22 .

How much warranty expense is reported for November and for December?

Required information Problem 11-4A (Algo) Estimating warranty expense and liability LO

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