The following information applies to the questions displayed below.
On October 29, 2014, 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 $20 and its retail selling price is $75 in both 2014 and 2015. The manufacturer has advised the company to expect warranty costs to equal 8% of dollar sales. The following transactions and events occurred.
2014
Nov. 11 Sold 105 razors for $7,875 cash.
30 Recognized warranty expense related to November sales with an adjusting
entry.
Dec. 9 Replaced 15 razors that were returned under the warranty.
16 Sold 220 razors for $16,500 cash.
29 Replaced 30 razors that were returned under the warranty.
31 Recognized warranty expense related to December sales with an adjusting
entry.
2015
Jan. 5 Sold 150 razors for $11,250 cash.
17 Replaced 50 razors that were returned under the warranty.
31 Recognized warranty expense related to January sales with an adjusting
entry.
Required
1. Prepare journal entries to record these transactions and adjustments.
2. How much warranty expense is reported for November and for December?
3. How much warranty expense is reported for January?
4. What is the balance of the Estimated Warranty Liability account as of December 31?
5. What is the balance of the Estimated Warranty Liability account as of January 31?

Answer:

Lobo Co.

Journal Entries:

Nov. 11 Debit Cash $7,875

Credit Sales Revenue $7,875

To record the sale of 105 razors for cash.

Nov. 11 Debit Cost of Goods Sold $2,100

Credit Inventory $2,100

To record the cost of goods sold for 105 razors at $20 each.

Dec. 16: Debit Cash $16,500

Credit Sales Revenue $16,500

To record the sale of 220 razors for cash.

Debit Cost of Goods Sold $4,400

Credit Inventory $4,400

To record the cost of goods sold.

Jan. 5: Debit Cash $11,250

Credit Sales Revenue $11,250

To record the sale of 150 razors for cash.

Debit Cost of Goods Sold $3,000

Credit Inventory $3,000

To record the cost of goods sold.

Adjusting Journal Entries:

Nov. 30: Debit Warranty Expense $630

Credit Warranty Liability $630

To record the warranty expense for November sales.

Dec. 9: Debit Warranty Liability $300

Credit Inventory $300

To replace 15 razors.

Dec. 16: Debit Warranty Expense $1,672

Credit Warranty Liability $1,672

To record the warranty expense for December sales.

Dec. 29: Debit Warranty Liability $600

Credit Inventory $600

To replace 30 razors.

Dec. 31: Debit Income Summary $2,302

Credit Warranty Expense $2,302

To recognize the warranty expense for the period.

Jan. 5: Debit Warranty Expense $900

Credit Warranty Liability $900

To record warranty expense for January sales.

Jan. 17: Debit Warranty Liability $1,000

Credit Inventory $1,000

To record the replacement of 50 razors.

Jan. 31: Debit Warranty Expense $100

Credit Warranty Liability $100

To recognize warranty expense for January sales.

2. The Warranty Expense for November is $630 and for December is $1,602.

3. The Warranty Expense for January is: $1,000

4. The balance of the Estimated Warranty Liability account as of December 31 is:

= $1,402

5. The balance of the Estimated Warranty Liability account as of January 31 is:

= $1,302

Explanation:

a) Data and Calculations:

Cost per new razor = $20

Retail selling price = $75

Expected warranty costs = 8% of dollar sales

b) Estimated Warranty Liability Account:

Nov. 30: Credit Warranty Liability  $630

Dec. 9: Debit Warranty Liability    ($300)

Dec. 16: Credit Warranty Liability $1,672

Dec. 29: Debit Warranty Liability  ($600)

Dec. 31: Balance                           $1,402

Jan. 5: Credit Warranty Liability    $900

Jan. 17: Debit Warranty Liability ($1,000)

Jan. 31 Balance                            $1,302

Warranty Expense Account:

Nov. 30: Debit Warranty Expense  $630

Dec. 16: Debit Warranty Expense $1,672

Dec. 31: Debit Income Summary $2,302

Jan. 5: Debit Warranty Expense $900

Jan. 31: Debit Warranty Expense $100

Jan. 31: Debit Income Summary $1,000

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The equilibrium price in the market is $____ per calendar, and the equilibrium quantity is ___ calendars brought and sold per month.


Complete the ff table by indicating at each price whether there is a shortage or surplus in the market, the amount of that shortage or surplus, and whether this places upward or downward.

Price
48 (shortage/surplus) amount ____ Pressure (upward/downward)
32 (shortage/surplus) amount ____ Pressure (upward/downward)

two examples of events that occasions which people come together​

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A reality of living in a risk society is that:____________

a. social justice is, in fact, dispensed equally across all citizen groups, irrespective of ethnicity, income level, or other factors.
b. incomes are regulated by government policy to ensure equality across professions and worker class.
c. laws cannot be enacted to regulate corporations' adherence to accounting rules.
d. currency exchange rates are set by the Caux Principles.
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define leverage economics.​

Identify the possessive pronoun in the following sentence: "I love my new computer!"


A I
B love
C
my

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a) What do you understand by the term qualitative research?
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JESTION THREE (3)
What is a research problem and why is it important?
Examine five (5) characteristics of a good problem stater​

In which one of the following instances is the rivalry among competing sellers generally
weaker?
When the industry's product is costly to hold in inventory, perishable, or seasonal
o When one or more rivals are dissatisfied with their business performance and are making
aggressive moves to attract more customers
When there are so many rivals that any one company's actions have little direct impact on
the businesses of rivals
when rivals have dissimilar costs and dissimilar industry outlooks
When competing sellers are active in making fresh moves to improve their market standing
and business performance
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Describe the legal aspects of buying ?

. AT&T's decision to move its corporate headquarters meant that about 700
of the company's best-paid executives were moving to the Dallas area.
What did that probably do to the demand curve for expensive homes in the
Dallas area?
A. Shift to the left B. Shift to the right

Bridges and Lloyd, an accounting firm, provides consulting and tax planning services. For many years, the firm's total administrative cost (currently $250,000) has been allocated to services on the basis of billable hours to clients. A recent analysis found that 65% of the firm's billable hours to clients resulted from tax planning services, while 35% resulted from consulting services. The firm, contemplating a change to activity-based costing, has identified three components of administrative cost, as follows:
Staff Support $ 180,000
In-house computing charges 50,000
Miscellaneous office costs 20,000
Total $ 250,000
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If Bridges and Lloyd switched from its current accounting method to an activity-based costing system, the amount of administrative cost chargeable to consulting services would:________.
a. decrease by $23,500.
b. change, but the amount cannot be determined based on the information presented.
c. increase by $23,500.
d. decrease by $32,500.
e. change by an amount other than those listed.

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