Question

Exercise 7-8 Sales returns (LO7-4] Halifax Manufacturing allows its customers to return merchandise for any reason up to 90 days after delivery and receive a credit to their accounts. All of Halifax's sales are for credit (no cash is collected at the time of sale). The company began 2018 with an alowance for sales returns of $300,000. During 2018, Halifax sold merchandise on account for $11,500,000. This merchandise cost Haldex $7,475,000 (65% of selling prices). Also during the year, customers returned $450,000 in sales for credit Sales returns, estimated to be 4% of sales, are recorded as an adjusting entry at the end of the year. Required: 1. Prepare an entry to record actual merchandise returns as they occur (not adjusting the allowance for sales returns and then record a year-end entry to adjust the allowance for sales returns to its appropriate balance. 2. What is the amount of the year-end allowance for sales returns after the adjusting entry is recorded? Complete this question by entering your answers in the tabs below. Required 2 Required 1 Credit Prepare entries to (a) record actual returns in 2021 of merchandise that was sold prior to 2021: (b) record actual returns in 2021 of merchandise that was sold during 2021; and (c) adjust the refund liability to its appropriate balance at year end. (Ir no entry is required for a transaction/event, select "No journal entry required" in the first account field.) Debit View journal entry worksheet General Journal View transaction list Year No 2021 Refund liability Accounts receivable Next > !!! 4 of 7 < Prev

help with journal entries

Answer 1

File Edit View Insert Format Tools Data Window Excel Home Page Layout Formulas Review Vi Insert Draw Data Calibri (Body) A 12 A I U Paste fx M31 A C E 1 No Year JE 2021 Sales Return Debit Credit 1 450000 Account Receivable 450000 4 450000 65/100 292500 2021 Inventory Cost of goods sold 2 292500 7 2021 Allowances 150000 150000 sales return 10 11 12 13 14 15 16 17