Adjusting entry for customer refunds, allowances, and returns State Company had sales of $1,700,000 and related cost of goods sold of $1,000,000 for its first year of operations ending December 31, 2011. Statz provides customers a refund for any returned or damaged merchandise. At the end of 2041, Statz Company estimates that customers will request refunds for 1.6% of sales and estimates that merchandise costing $14,000 will be returned. Assume that on February 3, 2012, Back Co. returned merchandise with an invoice amount of 54,800 for a cash refund. The returned merchandise originally cost State Company $3,100 2. Journalize the adjusting entries on December 31, 2041, to record the expected customer retums. If an amount box does not require an entry, leave it blank. 2011 Dec. 31 Sales Customer Refunds Payable 2011 Dec. 31 Estimated Returns Inventory Cost of Goods Sold 88 b. Journalize the entries to record the returned merchandise and cash refund to Buck Co. on February 3, 2012. tf an amount box does not require an entry, leave it blank. 2012 Feb. 3 Customer Refunds Payable Cash & 2012 Feb. 3 Inventory Estimated Returns Inventory 88