LIhe tollowing intormation 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 70 razors for $6, 300 cash. 30 Recognized warranty expense related to November sales with an adjusting entry. 9 Replaced 14 razors that were returned under the warranty. 16 Sold 210 razors for $18,900 cash. 29 Replaced 28 razors that were returned under the warranty. 31 Recognized warranty expense related to December sales with an adjusting entry. 5 Sold 140 razors for $12, 600 cash. 17 Replaced 33 razors that were returned under the warranty. 31 Recognized warranty expense related to January sales with an adjusting entry. Dec. Jan. Problem 9-4A Part 4 4. What is the balance of the Estimated Warranty Liability account as of December 31? Estimated warranty liability balance < Piev 14 15 of 15 Next >
LIhe tollowing intormation 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 70 razors for $6, 300 cash. 30 Recognized warranty expense related to November sales with an adjusting entry. 9 Replaced 14 razors that were returned under the warranty. 16 Sold 210 razors for $18,900 cash. 29 Replaced 28 razors that were returned under the warranty. 31 Recognized warranty expense related to December sales with an adjusting entry. 5 Sold 140 razors for $12, 600 cash. 17 Replaced 33 razors that were returned under the warranty. 31 Recognized warranty expense related to January sales with an adjusting entry. Dec. Jan. Problem 9-4A Part 4 4. What is the balance of the Estimated Warranty Liability account as of December 31? Estimated warranty liability balance < Piev 14 15 of 15 Next >
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:[The tollowing intormation 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 70 razors for $6, 300 cash.
30 Recognized warranty expense related to November sales with an adjusting entry.
9 Replaced 14 razors that were returned under the warranty.
16 Sold 210 razors for $18,900 cash.
29 Replaced 28 razors that were returned under the warranty.
31 Recognized warranty expense related to December sales with an adjusting entry.
5 Sold 140 razors for $12,600 cash.
17 Replaced 33 razors that were returned under the warranty.
31 Recognized warranty expense related to January sales with an adjusting entry.
Dec.
Jan.
Problem 9-4A Part 4
4. What is the balance of the Estimated Warranty Liability account as of December 31?
Estimated warranty liability balance
< Piev
of 15
Next >
14 15
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