October 29, Lobo Co. began operations by purchasing razors for resale. The razors have a 90-day warranty. 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 ec 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.

October 29, Lobo Co. began operations by purchasing razors for resale. The razors have a 90-day warranty. 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 ec 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.

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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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 $16 and its retail selling price is $80. The company expects warranty costs to equal 8% of dollar sales. The following transactions occurred. Nov. 11 Sold 60 razors for $4,800 cash. 30 Recognized warranty expense related to November sales with an adjusting entry. Dec. 9 Replaced 12 razors that were returned under the warranty. 16 Sold 180 razors for $14,400 cash. 29 Replaced 24 razors that were returned under the warranty. 31 Recognized warranty expense related to December sales with an adjusting entry. Jan. 5 Sold 120 razors for $9,600 cash. 17 Replaced 29 razors that were returned under the warranty. 31 Recognized warranty expense related to January sales with an adjusting entry.…
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 $16 and its retail selling price is $80. The company expects warranty costs to equal 6% of dollar sales. The following transactions occurred. November 11 Sold 60 razors for $4,800 cash. November 30 Recognized warranty expense related to November sales with an adjusting entry. December 9 Replaced 12 razors that were returned under the warranty. December 16 Sold 180 razors for $14,400 cash. December 29 Replaced 24 razors that were returned under the warranty. December 31 Recognized warranty expense related to December sales with an adjusting entry. January 5 Sold 120 razors for $9,600 cash. January 17 Replaced 29 razors that were returned under the warranty. January 31 Recognized warranty expense related to January sales with an…
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 $16 and its retail selling price is $70. The company expects warranty costs to equal 5% of dollar sales. The following transactions occurred. November 11 Sold 60 razors for $4,200 cash.. November 30 Recognized warranty expense related to November sales with an adjusting entry. Replaced 12 razors that were returned under the warranty. Sold 180 razors for $12,600 cash. December 9 December 16 December 29 December 31 Replaced 24 razors that were returned under the warranty. Recognized warranty expense related to December sales with an adjusting entry. Sold 120 razors for $8,400 cash. January 5 January 17 Replaced 29 razors that were returned under the warranty. January 31 Recognized warranty expense related to January sales with an…
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 $80. The company expects warranty costs to equal 7% of dollar sales. The following transactions occurred. November 11 Sold 70 razors for $5,600 cash. November 30 Recognized warranty expense related to November sales with an adjusting entry. December 9 Replaced 14 razors that were returned under the warranty. December 16 Sold 210 razors for $16,800 cash. December 29 Replaced 28 razors that were returned under the warranty. December 31 Recognized warranty expense related to December sales with an adjusting entry. January 5 Sold 140 razors for $11,200 cash. January 17 Replaced 33 razors that were returned under the warranty. January 31 Recognized warranty expense related to…
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 $13 and its retail selling price is $60. The company expects warranty costs to equal 8% 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. December 9 Replaced 14 razors that were returned under the warranty. December 16 Sold 210 razors for $12,600 cash. December 29 Replaced 28 razors that were returned under the warranty. December 31 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…
On November 10, Lee Co. began operations by purchasing coffee grinders for resale. The grinders have a 60-day warranty. When a grinder is returned, the company discards it and mails a new one from merchandise inventory to the customer. The company’s cost per new grinder is $24 and its retail selling price is $50. The company expects warranty costs to equal 10% of dollar sales. The following transactions occurred. Nov. 16 Sold 50 grinders for $2,500 cash. 30 Recognized warranty expense related to November sales with an adjusting entry. Dec. 12 Replaced six grinders that were returned under the warranty. 18 Sold 200 grinders for $10,000 cash. 28 Replaced 17 grinders that were returned under the warranty. 31 Recognized warranty expense related to December sales with an adjusting entry. Jan. 7 Sold 40 grinders for $2,000 cash. 21 Replaced 36 grinders that were returned under the warranty. 31 Recognized warranty expense related to January sales with an adjusting entry. Required 1. Prepare…
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[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 $70. The company expects warranty costs to equal 8% of dollar sales. The following transactions occurred. November 11 Sold 80 razors for $5,600 cash. November 30 Recognized warranty expense related to November sales with an adjusting entry. Replaced 32 razors that were returned under the warranty. December 9 December 16 December 29 December 31 January 5 January 17 Replaced 16 razors that were returned under the warranty. Sold 240 razors for $16,800 cash. Recognized warranty expense related to December sales with an adjusting entry. Sold 160 razors for $11,200 cash. Replaced 37 razors that were returned under the warranty.…
During June, Vixen Company sells $850,000 in merchandise that has a one year warranty. Experience shows that warranty expenses average about 3% of the selling price. Customers returned $14,000 of merchandise for warranty replacement during the month. The entry to record the estimated warranty provision at the end of the month is: Multiple Choice A) Debit Warranty Expense $11,500; credit Estimated Warranty Liability $11,500. B) Debit Warranty Expense $14,000; credit Estimated Warranty Liability $14,000. C) Debit Warranty Expense $25,500; credit Estimated Warranty Liability $25,500. D) Debit Estimated Warranty Liability $14,000; credit Warranty Expense $14,000. E) Debit Estimated Warranty Liability $11,500; credit Warranty Expense $11,500.
On December 1, XYZ Limited introduces a new product that includes a one-year warranty on parts. In November, 1000 units are sold. Management believes that 15% of the units will be defective and that the average warranty costs will be $50 per unit. Prepare the adjusting entry at November 30 to accrue the estimated warranty cost.
Oven Roasted sold $321,000 of consumer electronics during July under a two-year warranty. The cost to repair defects under the warranty is estimated at 5% of the sales price. On November 11, a customer was given $97 cash under terms of the warranty. Question Content Area a. Provide the journal entry for the estimated warranty expense on July 31 for July sales. If an amount box does not require an entry, leave it blank. Date Account Debit Credit July 31 Feedback Area Feedback Question Content Area b. Provide the journal entry for the November 11 cash payment. If an amount box does not require an entry, leave it blank. Date Account Debit Credit Nov. 11
Pink Pty Ltd. sold $110,000 of cosmetic products during July under a three-month warranty. The cost to repair defects under the warranty is estimated at 2.5% of the sales price. On August 10, a customer required a $100 part replacement plus $40 of labour under the warranty. Journal entry to record estimated warranty expenses will be: Select one: a. Provision for product warranty Dr 2,750 Warranty Expenses Cr 2,750 b. Warranty Expenses Dr 140 Provision for product warranty Cr 140 c. Warranty Expenses Dr 2,750 Provision for product warranty Cr 2,750 d. Provision for product warranty Dr 140 Warranty Expenses Cr 140