On March $10,2025,$ Carla Vista Company sold to Pharoah Hardware $160$ tool sets at a price of $$50$ each $($cost $$30$ per set$)$ with terms of $\frac{n}{60},$ f$.$o$.$b$.$ shipping point. Carla Vista allows

Pharoah to return any unused tool sets within $60$ days of purchase. Carla Vista estimates that $(1)10$ sets will be returned, $(2)$ the cost of recovering the products will be immaterial, and $(3)$

the returned tools sets can be resold at a profit. On March $25,2025,$ Pharoah returned $7$ tool sets and received a credit to its account.

$($a$)$

Your answer is partially correct.

Prepare journal entries for Carla Vista to record $(1)$ the sale on March $10,2025,(2)$ the return on March $25,2025,$ and $(3)$ any adjusting entries required on March $31,2025($when

Carla Vista prepares financial statements$).$ Carla Vista believes the original estimate of returns is correct. $($Credit account titles are automatically indented when the amount is entered. Do

not indent manually. If no entry is required, select $"$No entry" for the account titles and enter $0$ for the amounts. List all debit entries before credit entries.$)$

No$.$

Date

Account Titles and Explanation

Debit

Credit

$(1)$

Accounts Receivable

$[$

$($To record sales$)$

Cost of Goods Sold

$($To record cost of goods sold$)($To record cost of goods sold$)$

$(2)$

Accounts Receivable

$($To record sales returns$)$

Returned Inventory

$($To record cost of goods returned$)$

$(3)$

Sales Returns and Allowances

$($To record sales returns$)$

$$

$($To record cost of goods returned$)$

Sales Returns and Allowances

$$

longrightarrow

$($Adjusting entry for sales returns$)$

$1($b$1)$

Indicate the income statement reporting by Carla Vista at March $31,2025,$ of the information related to the Pharoah sales transaction. $($b$2)$

Indicate the balance sheet reporting by Carla Vista at March $31,2025,$ of the information related to the Pharoah sales transaction.

CARLA VISTA COMPANY

Balance Sheet $($Partial$)$