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Required information Problem 9.4A (Static) Estimating warranty expense and liability LO P4 [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 $20 and its retail selling price is $75. The company expects warranty costs to equal 8% of dollar sales. The following transactions occurred. Noverber 11 sold 105 razors for $7,875 canh. Novenber 30 Recognized warranty expense related to Noverber aales with an adjusting entry. Decenber 9 roplaced is razore that vere returned under the varranty. December 16 sold 220 razors for $16,500 cash. December 29 Replaced 30 razors that vere returned under the varranty. Decenber 31 hecognized warranty expense related to Dece=ber sales with an adjusting entry. January 5 sold 150 razora tor $11,250 cash. January 17 Replaced 50 razorn that wero returned under the varranty. January 31 Recognized warranty expense related to Jantary sales with an adjuating entry. Problem 9-4A (Static) Part 5 5. What is the balance of the Estimated Warranty Liability account as of January 31

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