80.2K

Verified Solution

Link Copied!

5 parts

Required information Problem 9-4A (Algo) Estimating warranty expense and liability LO P4 [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 malls 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 8% of dollar sales. The following transactions occurred. Novenber 11 sold 50 razors for $4,008 cash. November 30 Aecognized warranty expense related to November sales with an adjusting entry. Decenber 9 Replaced 10 razors that were returned under the warranty. December 16 Sold 150 razors for $12,000 cash. Decenber 29 Replaced 20 razors that were returned under the warranty. December 31 Recognized warranty expense related to December sates with an adjusting entry. Janiary 5 sold 100 razors for $8,000 cash. January 17 Replaced 25 razors that were returned under the warranty. January 31 Recognized warranty expense related to January sales with an adjusting entry. Problem 9.4A (Algo) Part 1 Required: 1. Prepare journal entries to record above transactions and adjustments. mework (i) (1) Required information View transaction list 1 Record the sales revenue of 50 razors for $4,000 cash. 2. Record the cost of goods sold for 50 razors. 3 Record the estimated warranty expense at 8% of November sales. 4 Record the replacement of 10 razors that were returned under the warranty. 5 Record the sales revenue of 150 razors for $12,000 cash. 6 Record the cost of goods sold for 150 razors. 7 Record the replacement of 20 razors that were returned Note : = journal entry has been entered Record entry Clear entry View general journal 7 Record the replacement of 20 razors that were returned under the warranty. 8 Record the estimated warranty expense at 8% of - December sales. 9 Record the sales revenue of 100 razors for $8,000 cash. 10 Record the cost of goods sold for 100 razors. 11 Record the replacement of 25 razors that were returned under the warranty. 12. Record the adjusting entry for warranty expense for the month of January. Note: = journal entry has been entered [the ronowing imormation appies to the questons arsplayea velow.] On October 29, Lobo Company began operations by purchasing razors for resale. The razors have a 90 -da When a razor is returned, the company discards it and mails a new one from Merchandise Inventory to the company's cost per new razor is $15 and its retall selling price is $80. The company expects warranty costs dollar sales. The following transactions occurred. November 11 Sold 50 razors for $4,000 cash. November 30 Recognized warranty expense related to November sales with an adjusting entry. December 9 Replaced 10 razors that were returned under the warranty. December 16 Sold 150 razors for $12,000 cash. December 29 Replaced 20 razors that were returned under the warranty. December 31 Recognized warranty expense related to December sales with an adjusting entry. January 5 Sold 100 razors for $8,000 cash. January 17 Replaced 25 razors that were returned under the warranty. January 31 Recognized warranty expense related to January sales with an adjusting entry. Problem 9-4A (Algo) Part 2 2. How much warranty expense is reported for November and for December? [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 b When a razor is returned, the company discards it and mails a new one from Merchandise Inventory to the cus company's cost per new razor is $15 and its retail selling price is $80. The company expects warranty costs to dollar sales. The following transactions occurred. November 11 sold 50 razors for $4,000 cash. November 30 Recognized warranty expense related to November sales with an adjusting entry. December 9 Replaced 10 razors that were returned under the warranty. December 16 Sold 150 razors for $12,000 cash. December 29 Replaced 20 razors that were returned under the warranty. December 31 Recognized warranty expense related to December sales with an adjusting entry. January 5 Sold 100 razors for $8,000 cast. January 17 Replaced 25 razors that were returned under the warranty. January 31 Recognized warranty expense related to January sales with an adjusting entry. Problem 9-4A (Algo) Part 3 3. How much warranty expense is reported for January? [The following information applles to the questions displayed below.] On October 29, Lobo Company began operations by purchasing razors for resale, The razors have a 90 When a razor is returned, the company discards it and mails a new one from Merchandise Inventory to the company's cost per new razor is $15 and its retail selling price is $80. The company expects warranty cos dollar sales. The following transactions occurred. November 11 Sold 50 razors for $4,000 cash. November 30 Recognized warranty expense related to November sales with an adjusting entry. December 9 Replaced 10 razors that were returned under the warranty. December 16 Sold 150 razors for $12,000 cash. December 29 Replaced 20 razors that were returned under the warranty. December 31 Recognized warranty expense related to December sales with an adjusting entry. January 5 Sold 100 razors for $8,000 cash. January 17 Replaced 25 razors that were returned under the warranty. January 31 Recognized warranty expense related to January sales with an adjusting entry. Problem 9-4A (Algo) Part 4 4. What is the balance of the Estimated Warranty Liability account as of December 31? [The following information applies to the questions displayed below] On October 29, Lobo Company began operations by purchasing fazors for resale. The razors have a 90-day warranty. When a razor is retumed, the company discards it and mails a new one from Merchandise Inventory to the customer. TI company's cost per new razor is $15 and its retall selling price is $80. The company expects warranty costs to equal 8 ; dollar sales. The following transactions occurred. Novenber 11 Sold 50 razors for $4,000 cash. Noveaber 30 Recognized warranty expense related to November sales with an adjusting entry. December 9 Replaced 10 razors that were returned under the warranty. Decenber 16 Sold 150 razors for $12, e0e cash. December 29 Replaced 20 razors that were returned under the warranty. December 31 Recognized warranty expense related to December sates with an adjusting entry. January 5 Sold 100 razors for $8,000 cast. January 17 Replaced 25 razors that were returned under the warranty. January 31 Recognized warranty expense related to January sales with an adjusting entry. Problem 9-4A (Algo) Part 5 5. What is the balance of the Estimated Warranty Liability account as of January 31 ? Required information Problem 9-4A (Algo) Estimating warranty expense and liability LO P4 [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 malls 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 8% of dollar sales. The following transactions occurred. Novenber 11 sold 50 razors for $4,008 cash. November 30 Aecognized warranty expense related to November sales with an adjusting entry. Decenber 9 Replaced 10 razors that were returned under the warranty. December 16 Sold 150 razors for $12,000 cash. Decenber 29 Replaced 20 razors that were returned under the warranty. December 31 Recognized warranty expense related to December sates with an adjusting entry. Janiary 5 sold 100 razors for $8,000 cash. January 17 Replaced 25 razors that were returned under the warranty. January 31 Recognized warranty expense related to January sales with an adjusting entry. Problem 9.4A (Algo) Part 1 Required: 1. Prepare journal entries to record above transactions and adjustments. mework (i) (1) Required information View transaction list 1 Record the sales revenue of 50 razors for $4,000 cash. 2. Record the cost of goods sold for 50 razors. 3 Record the estimated warranty expense at 8% of November sales. 4 Record the replacement of 10 razors that were returned under the warranty. 5 Record the sales revenue of 150 razors for $12,000 cash. 6 Record the cost of goods sold for 150 razors. 7 Record the replacement of 20 razors that were returned Note : = journal entry has been entered Record entry Clear entry View general journal 7 Record the replacement of 20 razors that were returned under the warranty. 8 Record the estimated warranty expense at 8% of - December sales. 9 Record the sales revenue of 100 razors for $8,000 cash. 10 Record the cost of goods sold for 100 razors. 11 Record the replacement of 25 razors that were returned under the warranty. 12. Record the adjusting entry for warranty expense for the month of January. Note: = journal entry has been entered [the ronowing imormation appies to the questons arsplayea velow.] On October 29, Lobo Company began operations by purchasing razors for resale. The razors have a 90 -da When a razor is returned, the company discards it and mails a new one from Merchandise Inventory to the company's cost per new razor is $15 and its retall selling price is $80. The company expects warranty costs dollar sales. The following transactions occurred. November 11 Sold 50 razors for $4,000 cash. November 30 Recognized warranty expense related to November sales with an adjusting entry. December 9 Replaced 10 razors that were returned under the warranty. December 16 Sold 150 razors for $12,000 cash. December 29 Replaced 20 razors that were returned under the warranty. December 31 Recognized warranty expense related to December sales with an adjusting entry. January 5 Sold 100 razors for $8,000 cash. January 17 Replaced 25 razors that were returned under the warranty. January 31 Recognized warranty expense related to January sales with an adjusting entry. Problem 9-4A (Algo) Part 2 2. How much warranty expense is reported for November and for December? [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 b When a razor is returned, the company discards it and mails a new one from Merchandise Inventory to the cus company's cost per new razor is $15 and its retail selling price is $80. The company expects warranty costs to dollar sales. The following transactions occurred. November 11 sold 50 razors for $4,000 cash. November 30 Recognized warranty expense related to November sales with an adjusting entry. December 9 Replaced 10 razors that were returned under the warranty. December 16 Sold 150 razors for $12,000 cash. December 29 Replaced 20 razors that were returned under the warranty. December 31 Recognized warranty expense related to December sales with an adjusting entry. January 5 Sold 100 razors for $8,000 cast. January 17 Replaced 25 razors that were returned under the warranty. January 31 Recognized warranty expense related to January sales with an adjusting entry. Problem 9-4A (Algo) Part 3 3. How much warranty expense is reported for January? [The following information applles to the questions displayed below.] On October 29, Lobo Company began operations by purchasing razors for resale, The razors have a 90 When a razor is returned, the company discards it and mails a new one from Merchandise Inventory to the company's cost per new razor is $15 and its retail selling price is $80. The company expects warranty cos dollar sales. The following transactions occurred. November 11 Sold 50 razors for $4,000 cash. November 30 Recognized warranty expense related to November sales with an adjusting entry. December 9 Replaced 10 razors that were returned under the warranty. December 16 Sold 150 razors for $12,000 cash. December 29 Replaced 20 razors that were returned under the warranty. December 31 Recognized warranty expense related to December sales with an adjusting entry. January 5 Sold 100 razors for $8,000 cash. January 17 Replaced 25 razors that were returned under the warranty. January 31 Recognized warranty expense related to January sales with an adjusting entry. Problem 9-4A (Algo) Part 4 4. What is the balance of the Estimated Warranty Liability account as of December 31? [The following information applies to the questions displayed below] On October 29, Lobo Company began operations by purchasing fazors for resale. The razors have a 90-day warranty. When a razor is retumed, the company discards it and mails a new one from Merchandise Inventory to the customer. TI company's cost per new razor is $15 and its retall selling price is $80. The company expects warranty costs to equal 8 ; dollar sales. The following transactions occurred. Novenber 11 Sold 50 razors for $4,000 cash. Noveaber 30 Recognized warranty expense related to November sales with an adjusting entry. December 9 Replaced 10 razors that were returned under the warranty. Decenber 16 Sold 150 razors for $12, e0e cash. December 29 Replaced 20 razors that were returned under the warranty. December 31 Recognized warranty expense related to December sates with an adjusting entry. January 5 Sold 100 razors for $8,000 cast. January 17 Replaced 25 razors that were returned under the warranty. January 31 Recognized warranty expense related to January sales with an adjusting entry. Problem 9-4A (Algo) Part 5 5. What is the balance of the Estimated Warranty Liability account as of January 31

Answer & Explanation Solved by verified expert

See Answer