Required informationProblem 9-4A (Algo) Estimating warranty expense and liability LO P4[The following information 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 arazor is returned, the company discards it and mails a new one from Merchandise Inventory to the customer. Thecompany's cost per new razor is $13 and its retail selling price is $60. The company expects warranty costs to equal 5% ofdollar sales. The following transactions occurred.Nov. 11 Sold 60 razors for $3,600 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 $10,800 cash.29 Replaced 24 razors that were returned under the warranty.31 Recognized warranty expense related to December sales with an adjusting entry.Jan. Sold 120 razors for $7,200 cash.17 Replaced 29 razors that were returned under the warranty.31 Recognized warranty expense related to January sales with an adjusting entry.Problem 9-4A (Algo) Part 1Required:1. Prepare journal entries to record above transactions and adjustments.Required informationJournal entry worksheet122567Record the sales revenue of 60 razors for $3,600 cash.Note: Enter debits before credits.CreditGeneral JournalDateNov 11Record entryClear entryView general journal16 of 25Required informationJournal entry worksheet< 13456128Record the cost of goods sold for 60 razors.Note: Enter debits before creditsDateGeneral JournalNov 11Record entryClear entryRequired informationJournal entry worksheet< 1235678Record the estimated warranty expense at 5% of November sales.Note: Enter debits before credits,General JournalDebitCreditDateNov 30Record entryClear entryView general journalRequired informationJournal entry worksheet<123567812>Record the replacement of 12 razors that were returned under the warranty.Note: Enter debits before creditsDateGeneral JournalDebitCreditDec 09Record entryClear entryView general journalRequired informationJournal entry worksheet12< 1 2 3 478Record the sales revenue of 180 razors for $10,800 cash.Note: Enter debits before creditsGeneral JournalDebitDateDec 16Record entryClear entryRequired informationJournal entry worksheet125Record the cost of goods sold for 180 razorsNote: Enter debits before creditsDateGeneral JournalDec 16Record entryClear entry< Prev6Debit12 13 1478Debit78DebitCreditView general journal12CreditView general journal12CreditView general journalNext Required informationJournal entry worksheet<123456128Record the replacement of 24 razors that were returned under the warranty.Note: Enter debits before credits.DateGeneral JournalDebitCreditDec 29Record entryClear entryView general journalRequired informationJournal entry worksheet456712Record the estimated warranty expense at 5% of December sales.Note: Enter debits before credits.General JournalDebitCreditDateDec 31Record entryClear entryView general journalRequired informationJournal entry worksheet<145678912Record the sales revenue of 120 razors for $7,200 cash.Note: Enter debits before credits,DateGeneral JournalCreditJan 05Record entryClear entryView general journalRequired informationJournal entry worksheet< 176128Record the cost of goods sold for 120 razors.Note: Enter debits before credits.General JournalCreditDateJan 05Record entryClear entryView general JournalRequired informationJournal entry worksheet55678 9101112Record the replacement of 29 razors that were returned under the warranty.Note: Enter debits before creditsGeneral JournalDebitCreditDateJan 17Record entryClear entryView general journalRequired information789110Journal entry worksheet5Record the adjusting entry for warranty expense for the month of January.11 135Note: Enter debits before credesDateGeneral JournalDebitCreditJan 31Record entryClear entryView general journal910DebitDebitتنCheck my work

Answer - PART 1 - No Date General journal Debit Credit 1 Nov-11 Cash $…

Answered: On October 29, Lobo Co. began…

Essentials Of Investments

11th Edition

ISBN:9781260013924

Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Chapter1: Investments: Background And Issues

Section: Chapter Questions

Problem 1PS

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Computer Wholesalers restores and resells notebook computers. It originally acquires the notebook computers from corporations upgrading their computer systems, and it backs each notebook it sells with a 90-day warranty against defects. Based on previous experience, Computer Wholesalers expects warranty costs to be approximately 5% of sales. Sales for the month of December are $420,000. Actual warranty expenditures in January of the following year were $14,000. Required: 1. Record warranty expense and warranty liability for the month of December based on 5% of sales. 2. Record the payment of the actual warranty expenditures of $14,000 in January of the following year. Complete this question by entering your answers in the tabs below. Required 1 Required 2 Record warranty expense and warranty liability for the month of December based on 5% of sales. Note: If no entry is required for a particular transaction/event, select "No Journal Entry Required" in the first account field. View…
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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…
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