Required information [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 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 $80. The company expects warranty costs to equal 8% of dollar sales. The following transactions occurred. November 11 Sold 80 razors for $6,400 cash. November 30 Recognised varranty expense related to November sales with an adjusting entry. December 9 December 14 Replaced 16 razors that were returned under the warranty. sold 240 razors for $19,200 cash. December 29 December 31 January 5 Replaced 32 razors that were returned under the warranty. Recognized warranty expense related to December sales with an adjusting entry. Sold 160 razors for $12,800 cash. January 17 Replaced 37 razors that were returned under the warranty. January 31 Recognized warranty expense related to January sales with an adjusting entry. quired: Prepare journal entries to record above transactions and adjustments. View transaction list Journal entry worksheet 5 6 7 Record the sales revenue of 80 razors for $6,400 cash. 8 ***** 12 > Journal entry worksheet < Note: Enter debits before credits Date November 11 Record the cost of goods sold for 80 razors. Record entry 4 5 Note: Enter cebits before credits General Journal Journal entry worksheet Clear entry 5 6 6 7 7 8..... Debit 12 8... Credit View general journal 12 Record the replacement of 16 razors that were returned under the warranty > > Journal entry worksheet Record the estimated warranty expense at 8% of November sales. Note: Enter debts beforecrets Date November 30 Record entry General Journal Clear entry O Journal entry worksheet Note: Enter cebits before cred 5 6 7 Record the sales revenue of 240 razors for $19,200 cash Debit 12 Credit View general journal 8 12 > >

Required information [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 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 $80. The company expects warranty costs to equal 8% of dollar sales. The following transactions occurred. November 11 Sold 80 razors for $6,400 cash. November 30 Recognised varranty expense related to November sales with an adjusting entry. December 9 December 14 Replaced 16 razors that were returned under the warranty. sold 240 razors for $19,200 cash. December 29 December 31 January 5 Replaced 32 razors that were returned under the warranty. Recognized warranty expense related to December sales with an adjusting entry. Sold 160 razors for $12,800 cash. January 17 Replaced 37 razors that were returned under the warranty. January 31 Recognized warranty expense related to January sales with an adjusting entry. quired: Prepare journal entries to record above transactions and adjustments. View transaction list Journal entry worksheet 5 6 7 Record the sales revenue of 80 razors for $6,400 cash. 8 ***** 12 > Journal entry worksheet < Note: Enter debits before credits Date November 11 Record the cost of goods sold for 80 razors. Record entry 4 5 Note: Enter cebits before credits General Journal Journal entry worksheet Clear entry 5 6 6 7 7 8..... Debit 12 8... Credit View general journal 12 Record the replacement of 16 razors that were returned under the warranty > > Journal entry worksheet Record the estimated warranty expense at 8% of November sales. Note: Enter debts beforecrets Date November 30 Record entry General Journal Clear entry O Journal entry worksheet Note: Enter cebits before cred 5 6 7 Record the sales revenue of 240 razors for $19,200 cash Debit 12 Credit View general journal 8 12 > >

Intermediate Accounting: Reporting And Analysis

3rd Edition

ISBN:9781337788281

Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Chapter9: Current Liabilities And Contingent Obligations

Section: Chapter Questions

Problem 10RE

See similar textbooks