1. Record the sales revenue of 50 razors for $3,000 cash 2. Record the cost of g

Question

1. Record the sales revenue of 50 razors for $3,000 cash 2. Record the cost of goods sold for 50 razors 3. Record the estimated warranty expense at 9% of November sales 4. Record the replacement of 10 razors that were returned under warranty 5. Record the sales revenue of 150 razors for $9,000 cash 6. Record the cost of goods sold for 150 razors 7. Record the replacement of 20 razors that were returned under the warranty 8. Record the estimated warranty expense at 9% of December sales
Problem 8.2 Transactions (adjustments for 2016) 1. Record the sales revenue of 100 razors for $6,000 cash 2. Record the cost of goods sold for 100 razors 3. Record the replacement of 25 razors that were returned under warranty 4. Record the adjusting entry for warranty expense for the month of January 2016
Problem 9-4A Warranty expense and liability estimation LO P4 The following formation apples to the ouestions displayed below On October 29, 2015, Lobo Co begen operations by purchasing razors for resale Lobo uses the perpetual Iinventory method The razors have a 90-day warranty that requires the company to replace any monworking razor When a razor is rearned, company dscach it and mats . new one hom Merchandie mortory to en customer The emany's cost per new tstor is SS4 and as etad seing price is $60 n bor, 2015 and 206. The-dacha er N" advsed he company toexpect wanity costs to equal9%ofdolar sales. The folwrngtransactions and events occurred 2015 Nov f1 Sold 50 razors for $3.000 cash Dec 9 Replaced 10 razors that were returned under the warranty 0 Recogrized wmanty expense related to November sales with an djunilting entry Sold 150 razors for S9000 cash 29 Replaced 20 razors that were returned under the wamanty 31 Recognined warranty expense related to December sales with an adjusting entry Jan 5 Sold 100 razors for $6.000 cash 17 Replaced 25 razors that were neturned under the warranty 31 Recognied warrenty expense related to Jenuary sales wih an adjusting entry

Explanation / Answer

1.2

Date General Journal Debit Credit 11-Nov Cash 3,000 Sales 3,000 11-Nov Cost of goods sold 700 Merchandise inventory 700 50*14 30-Nov Warranty expense 270 Estimated warranty liability 270 3000*9% 09-Dec Estimated warranty liability 140 Merchandise inventory 140 10*14 16-Dec Cash 9,000 Sales 9,000 16-Dec Cost of goods sold 2,100 Merchandise inventory 2,100 150*14 29-Dec Estimated warranty liability 280 Merchandise inventory 280 (20*14) 31-Dec Warranty expense 810 Estimated warranty liability 810

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