[dirtyredintokyo]

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On October 29, 2010, Bram Co. began operations by purchasing razors for resale. Bram 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 $14 and its retail selling price is $70 in both 2010 and 2011. The manufacturer has advised the company to expect warranty costs to equal 6% of dollar sales. The following transactions and events occurred.

2010

Nov. 11 Sold 60 razors for $4,200 cash.
30 Recognized warranty expense related to November sales with an adjusting entry.
Dec. 9 Replaced 12 razors that were returned under the warranty.
16 Sold 180 razors for $12,600 cash.
29 Replaced 24 razors that were returned under the warranty.
31 Recognized warranty expense related to December sales with an adjusting entry.

2011

Jan. 5 Sold 120 razors for $8,400 cash.
17 Replaced 29 razors that were returned under the warranty.
31 Recognized warranty expense related to January sales with an adjusting entry.


Requirement 1:
Prepare journal entries to record these transactions and adjustments for 2010 and 2011. (Omit the "$" sign in your response.)


Requirement 2:
How much warranty expense is reported for November 2010 and for December 2010? (Omit the "$" sign in your response.)


Requirement 3:
How much warranty expense is reported for January 2011? (Omit the "$" sign in your response.)


Requirement 4:
What is the balance of the Estimated Warranty Liability account as of December 31, 2010? (Omit the "$" sign in your response.)

Requirement 5:
What is the balance of the Estimated Warranty Liability account as of January 31, 2011? (Omit the "$" sign in your response.)