For the year ended December 31, 20Y8, ABC Inc. made total sales of $1,000,000, but expects...
For the year ended December 31, 20Y8, ABC Inc. made total sales of $1,000,000, but expects to receive requests for refunds of returned or damaged goods that are 2% of total sales. The company also expects to receive returns of goods costing $12,000. Prepare the adjusting entries required at year-end if 20Y8 is the company’s first year of operations.
Homework Answers
Damaged goods = 1000000 * 2%
= $20,000
Expected returns = $12000
Total sales returns for year end = 20000 + 12000 = $32000
Journal entry:-
| Sales returns | $32,000 | |
| Accounts receivables | $32,000 | |
| ( To record sales returns) |
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