On October 29, 2016, Lobo Co. began operations by purchasing razors for resale. Lobo uses the...

3.7 Ratings (366 Votes)

1.1
Date	General Journal	Debit	Credit
11-Nov	Cash	5,600
	Sales		5,600

11-Nov	Cost of goods sold	1120		=80*14
	Merchandise inventory		1,120

30-Nov	Warranty expense	448		=5600*8%
	Estimated warranty liability		448

9-Dec	Estimated warranty liability	224		=16*14
	Merchandise inventory		224

16-Dec	Cash	16,800
	Sales		16,800

16-Dec	Cost of goods sold	3,360		=240*14
	Merchandise inventory		3,360

29-Dec	Estimated warranty liability	448		=32*14
	Merchandise inventory		448

31-Dec	Warranty expense	1,344		=16800*8%
	Estimated warranty liability		1,344

1.2
Date	General Journal	Debit	Credit
5-Jan	Cash	11,200
	Sales		11,200

5-Jan	Cost of goods sold	2,240		=160*14
	Merchandise inventory		2,240

17-Jan	Estimated warranty liability	518		=37*14
	Merchandise inventory		518

31-Jan	Warranty expense	896		=11200*8%
	Estimated warranty liability		896

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Nov.	11	Sold 80 razors for $5,600 cash.
	30	Recognized warranty expense related to November sales with anadjusting entry.
Dec.	9	Replaced 16 razors that were returned under the warranty.
	16	Sold 240 razors for $16,800 cash.
	29	Replaced 32 razors that were returned under the warranty.
	31	Recognized warranty expense related to December sales with anadjusting entry.

Jan.	5	Sold 160 razors for $11,200 cash.
	17	Replaced 37 razors that were returned under the warranty.
	31	Recognized warranty expense related to January sales with anadjusting entry.

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