Required information Problem 11-4A Warranty expense and liability estimation LO P4 (The following information applies to the questions displayed below.) On October 29, 2016, Lobo Co. began operations by purchasing razors for resale. Lobo uses the perpetual inventory method. The razors have a 90-day warranty that requires the company to replace any nonworking razor. 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 $13 and its retail selling price is $90 in both 2016 and 2017. The manufacturer has advised the company to expect warranty costs to equal 5% of dollar sales. The following transactions and events occurred. 2016 Nov. 11 Sold 80 razors for $7,200 cash. 30 Recognized warranty expense related to November sales with an adjusting entry. Dec. 9 Replaced 16 razors that were returned under the warranty. 16 Sold 240 razors for $21,600 cash. 29 Replaced 32 razors that were returned under the warranty. 31 Recognized warranty expense related to December sales with an adjusting entry. 2017 Jan. 5 Sold 160 razors for $14,400 cash. 17 Replaced 37 razors that were returned under the warranty. 31 Recognized warranty expense related to January sales with an adjusting entry. Problem 11-4A Part 1 1.1 Prepare journal entries to record above transactions and adjustments for 2016. Problem 11-4A Part 1 1.1 Prepare journal entries to record above transactions and adjustments for 2016. View transaction list Journal entry worksheet Record the cost of goods sold for 80 razors. Note: Enter debits before credits. Date General Journal Debit Credit Nov 11 Cost of goods sold Record entry Clear entry View general journal 1.2 Prepare journal entries to record above transactions and adjustments for 2017. View transaction list Journal entry worksheet Record the cost of goods sold for 160 razors. Note: Enter debits before credits. Date General Journal Debit Credit Jan 05 Record entry Clear entry View general journal 1.2 Prepare journal entries to record above transactions and adjustments for 2017. View transaction list Journal entry worksheet Record the replacement of 37 razors that were returned under the warranty. Note: Enter debits before credits. Date General Journal Debit Credit Jan 17 Record entry Clear entry View general journal 1.2 Prepare journal entries to record above transactions and adjustments for 2017. View transaction list Journal entry worksheet Record the adjusting entry for warranty expense for the month of January 2017. Note: Enter debits before credits. Date General Journal Debit Credit Jan 31 Record entry clear entry View general journal