Sinclair Company had Sale $12,000,000 and related cost of merchandise sold of $7,200,000 for its first year
Question:
Sinclair Company had Sale $12,000,000 and related cost of merchandise sold of $7,200,000 for its first year of operations ending December 31, 20Y1. Sinclair Company provides customers :1 refund for any returned or damaged merchandise. At the end of 20Y1, Sinclair Company estimates that customers will request refunds for 1.5% of sales and that merchandise costing $120,000 will be returned. Assume that on February 15, 20Y2. Brown Co. returned merchandise with an invoice amount of $8,000 for a cash refund. The returned merchandise originally cost Sinclair Company 35,500.
(a) Journalize the adjusting entries on December 31, 20Y1, to record the expected customer returns.
(b) Journalize the entries to record the returned merchandise and cash refund to Brown Co. on February 15, 20Y2.
Step by Step Answer:
Accounting
ISBN: 9781337902687
28th Edition
Authors: Carl S. Warren, Christine Jonick, Jennifer Schneider