Scooby Doo Music sold CDs to retailers and recorded sales revenue of $800,000. During 2008, retailers returned

Question:

Scooby Doo Music sold CDs to retailers and recorded sales revenue of $800,000. During 2008, retailers returned CDs to Scooby Doo and were granted credit of $78,000. Past experience indicates that the normal return rate is 15%. Prepare Scooby Doo’s entries to record
(a) The $78,000 of returns and
(b) Estimated returns at December 31, 2008.