11/7/2017 Lab 9-4A Erica Sunken Accounting 101 &103 Smith Fall 2017-8th Edition:
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11/7/2017 Lab 9-4A Erica Sunken Accounting 101 &103 Smith Fall 2017-8th Edition: Fall 2017 MW LAB 103 Lab 9-4A instructions I help The following information applies to the questions displayed belowj On October 29, 2015, 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 2015 and 2016, The manufacturer has advised the company to expect warranty costs to equal 8% of dollar sales. The following transactions and events occurred. 2015 Nov. 11 Sold 105 razors for $7,875 cash. Dec. 9 Replaced 15 razors that were returned under the warranty 30 Recognized warranty expense related to November sales with an adjusting entry 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 2016 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 volue: 10.00 points Required Information 1.1 Prepare journal entries to record above transactions and adjustments for 2015. http:llezto.mheducation.com/hm.tpx70.7720059250224817_1510112781144Explanation / Answer
1.1 Journal entries for 2015
1.2 Journal entries for 2016
3. Warranty expense booked for 2015
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LOBO CO. General Journal for the year 2015 Date Account Debit Credit 11/11/15 Cash 7875 Sales Revenue 7875 (To record sale of 105 razors) 11/30/15 Warranty expense 630 Warranty liability 630 (To record warrantyliability @8% of sales) 12/09/15 Warranty liability 300 Inventory 300 (To record 15 razors replaced under warranty) 12/16/15 Cash 16500 Sales Revenue 16500 (To record sale of 220 razors) 12/29/15 Warranty liability 600 Inventory 600 (To record 30 razors replaced under warranty) 12/31/15 Warranty expense 1320 Warranty liability 1320 (To record warrantyliability @8% of sales)Related Questions
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