NOTE: Although this problem is different from that found in the text, you may use the working papers designed for Problem 9-2B in solving this problem.

On November 10, 2002, Maleta Company began operations by purchasing coffee makers for resale at $75 each. Maleta uses the perpetual inventory method. The coffee makers have a 90-day warranty that requires the company to replace any nonworking coffee maker. When a coffee maker is returned, the company discards it and mails a new one from Merchandise Inventory to the customer. The company's cost per new coffee maker is $48 in both 2002 and 2003. The manufacturer has advised the company to expect warranty costs to equal 15% of dollar sales. The following transactions and events occurred in 2002 and 2003.

2002 Transactions

Nov.	16	Sold 75 coffee makers for $5,625 Cash.
	30	Recognized warranty expense related to November sales with an adjusting entry.
Dec.	12	Replaced 10 coffee makers that were returned under the warranty.
	18	Sold 250 coffee makers for $18,750 cash.
	28	Replaced 13 coffee makers that were returned under the warranty.
	31	Recognized warranty expense related to December sales with an adjusting entry.

2003 Transactions

Jan.	7	Sold 60 coffee makers for $4,500 cash.
	21	Replaced 19 coffee makers that were returned under the warranty.
	31	Recognized warranty expense related to January sales with an adjusting entry.

Required:

1. Prepare journal entries to record these transactions and adjustments for 2002 and 2003.
2. How much warranty expense is reported for November 2002 and for December 2002?
3. How much warranty expense is reported for January 2003?
4. What is the balance of the Estimated Warranty Liability account as of December 31, 2002?
5. What is the balance of the Estimated Warranty Liability account as of January 31, 2002?