Required Information [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 $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 December 31 January 5 January 17 Replaced 33 razors that were returned under the warranty. January 31 Recognized warranty expense related to January sales with an adjusting entry. Replaced 28 razors that were returned under the warranty. Recognized warranty expense related to December sales with an adjusting entry. Sold 140 razors for $8,400 cash. What is the balance of the Estimated Warranty Liability account as of January 31? Answer is complete but not entirely correct. Estimated warranty liability balance S 1,615 X
Required Information [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 $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 December 31 January 5 January 17 Replaced 33 razors that were returned under the warranty. January 31 Recognized warranty expense related to January sales with an adjusting entry. Replaced 28 razors that were returned under the warranty. Recognized warranty expense related to December sales with an adjusting entry. Sold 140 razors for $8,400 cash. What is the balance of the Estimated Warranty Liability account as of January 31? Answer is complete but not entirely correct. Estimated warranty liability balance S 1,615 X
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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![Required Information
[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 $13 and its retall 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
December 9
December 16
December 29
December 31
January 5
January 17
January 31
Recognized warranty expense related to November sales with an adjusting entry.
Replaced 14 razors that were returned under the warranty.
Sold 210 razors for $12,600 cash.
Replaced 28 razors that were returned under the warranty.
Recognized warranty expense related to December sales with an adjusting entry.
Sold 140 razors for $8,400 cash..
Replaced 33 razors that were returned under the warranty.
Recognized warranty expense related to January sales with an adjusting entry.
to
5. What is the balance of the Estimated Warranty Liability account as of January 31?
Answer is complete but not entirely correct.
Estimated warranty liability balance S 1,615 X](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2Ffb024b48-b7d1-47d7-b01e-0e29dd2999d0%2F0ed32844-79a4-4bc7-9142-de1d75fef9b3%2Fzqs8tjr_processed.jpeg&w=3840&q=75)
Transcribed Image Text:Required Information
[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 $13 and its retall 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
December 9
December 16
December 29
December 31
January 5
January 17
January 31
Recognized warranty expense related to November sales with an adjusting entry.
Replaced 14 razors that were returned under the warranty.
Sold 210 razors for $12,600 cash.
Replaced 28 razors that were returned under the warranty.
Recognized warranty expense related to December sales with an adjusting entry.
Sold 140 razors for $8,400 cash..
Replaced 33 razors that were returned under the warranty.
Recognized warranty expense related to January sales with an adjusting entry.
to
5. What is the balance of the Estimated Warranty Liability account as of January 31?
Answer is complete but not entirely correct.
Estimated warranty liability balance S 1,615 X
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