On October 29, 2016, Lobo Co. began operations by purchasing razors for resale. Lobo uses the perpetual inventory method. The razors have a 90-day warranty that requires the company to replace any nonworking razor. 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 $90 in both 2016 and 2017. The manufacturer has advised the company to expect warranty costs to equal 8% of dollar sales. The following transactions and events occurred. 2016 Nov. 11 Sold 60 razors for $5,400 cash. 30 Recognized warranty expense related to November sales with an adjusting entry. 9 Replaced 12 razors that were returned under the warranty. 16 Sold 18e razors for $16,200 cash. 29 Replaced 24 razors that were returned under the warranty. 31 Recognized warranty expense related to December sales with an adjusting entry. Dec. 2017 5 Sold 120 razors for $10,800 cash. 17 Replaced 29 razors that were returned under the warranty. 31 Recognized warranty expense related to January sales with an adjusting entry. Jan. Problem 11-4A Part 1 1.1 Prepare journal entries to record above transactions and adjustments for 2016. View transaction list Journal entry worksheet
On October 29, 2016, Lobo Co. began operations by purchasing razors for resale. Lobo uses the perpetual inventory method. The razors have a 90-day warranty that requires the company to replace any nonworking razor. 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 $90 in both 2016 and 2017. The manufacturer has advised the company to expect warranty costs to equal 8% of dollar sales. The following transactions and events occurred. 2016 Nov. 11 Sold 60 razors for $5,400 cash. 30 Recognized warranty expense related to November sales with an adjusting entry. 9 Replaced 12 razors that were returned under the warranty. 16 Sold 18e razors for $16,200 cash. 29 Replaced 24 razors that were returned under the warranty. 31 Recognized warranty expense related to December sales with an adjusting entry. Dec. 2017 5 Sold 120 razors for $10,800 cash. 17 Replaced 29 razors that were returned under the warranty. 31 Recognized warranty expense related to January sales with an adjusting entry. Jan. Problem 11-4A Part 1 1.1 Prepare journal entries to record above transactions and adjustments for 2016. View transaction list Journal entry worksheet
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
Question
![Check my work
AM
[The following information applies to the questions displayed below.]
On October 29, 2016, Lobo Co. began operations by purchasing razors for resale. Lobo uses the perpetual inventory
method. The razors have a 90-day warranty that requires the company to replace any nonworking razor. 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 $90 in both 2016 and 2017. The manufacturer has advised the company
to expect warranty costs to equal 8% of dollar sales. The following transactions and events occurred.
Ya
M
2016
Nov. 11 Sold 60 razors for $5,400 cash.
Tue
30 Recognized warranty expense related to November sales with an adjusting entry.
9 Replaced 12 razors that were returned under the warranty.
16 Sold 180 razors for $16,200 cash.
29 Replaced 24 razors that were returned under the warranty.
31 Recognized warranty expense related to December sales with an adjusting entry.
9:0
Dec.
1:0
1:00
2017
5 Sold 120 razors for $10,800 cash.
17 Replaced 29 razors that were returned under the warranty.
31 Recognized warranty expense related to January sales with an adjusting entry.
Jan.
1:00
Wedne
8:30 A
Problem 11-4A Part 1
10:00 AM
1.1 Prepare journal entries to record above transactions and adjustments for 2016.
Thursday
9:00 AM
View transaction list
Journal entry worksheet
3
6
7 8](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F64166d4c-e482-4f11-a4ed-1a99eef62872%2F80b96def-5797-4035-8101-aa37bf4026ee%2F3g26yms_processed.jpeg&w=3840&q=75)
Transcribed Image Text:Check my work
AM
[The following information applies to the questions displayed below.]
On October 29, 2016, Lobo Co. began operations by purchasing razors for resale. Lobo uses the perpetual inventory
method. The razors have a 90-day warranty that requires the company to replace any nonworking razor. 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 $90 in both 2016 and 2017. The manufacturer has advised the company
to expect warranty costs to equal 8% of dollar sales. The following transactions and events occurred.
Ya
M
2016
Nov. 11 Sold 60 razors for $5,400 cash.
Tue
30 Recognized warranty expense related to November sales with an adjusting entry.
9 Replaced 12 razors that were returned under the warranty.
16 Sold 180 razors for $16,200 cash.
29 Replaced 24 razors that were returned under the warranty.
31 Recognized warranty expense related to December sales with an adjusting entry.
9:0
Dec.
1:0
1:00
2017
5 Sold 120 razors for $10,800 cash.
17 Replaced 29 razors that were returned under the warranty.
31 Recognized warranty expense related to January sales with an adjusting entry.
Jan.
1:00
Wedne
8:30 A
Problem 11-4A Part 1
10:00 AM
1.1 Prepare journal entries to record above transactions and adjustments for 2016.
Thursday
9:00 AM
View transaction list
Journal entry worksheet
3
6
7 8
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