Using adjustment data listed in E4-16, indicate the effects the adjustment for estimated customer refunds and returns on the liquidity metric working capital and profitability metric gross profit percent. Indicate in parentheses the effect of the adjustment for sales and cost of goods sold on the company's ability to attain an overall gross profit percent of 30%.

E4-16

Sales ............................................................................................$900,000

Estimated percent of sales expected to be refunded or issued an allowance in 20Y3....1.5%

Estimated cost of inventory expected to be returned in 20Y3...............................$6,000