Customer allowances and returns

Assume the following data for Casper Company before its year-end adjustments:

	Unadjusted Balances
	Debit	Credit
Sales		$1,750,000
Cost of Merchandise Sold	$1,000,000
Estimated Returns Inventory	600
Customer Refunds Payable		400
Estimated cost of merchandise that will be returned in the next year	$8,000
Estimated percent of refunds for current year sales	0.6%

a. Journalize the adjusting entry for the estimated customer allowances.

	Sales
	Customer Refunds Payable

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b. Journalize the adjusting entry for the estimated customer returns.

	Estimated Returns Inventory
	Cost of Merchandise Sold