Logo
Home Study Material Contact Search
AI Chat FREE
  1. business
  2. accounting
  3. e 7-8 sales returns l07-4 halifax manufacturing

E 7-8 Sales returns L07-4 Halifax Manufacturing allows its customers to return...

80.2K

Verified Solution

Question

Accounting

E 7-8 Sales returns L07-4
Halifax Manufacturing allows its customers to return merchandise for any reason up to 90 days after delivery and receive a credit to their
accounts. All of Halifax's sales are for credit (no cash is collected at the time of sale). The company began 2024 with a refund liability of
$300,000. During 2024, Halifax sold merchandise on account for $11,500,000. Halifaxs merchandise costs are 65% of merchandise selling
price. Also during the year, customers returned $450,000 in sales for credit, with $250,000 of those being returns of merchandise sold prior
to 2024, and the rest being merchandise sold during 2024. Sales returns, estimated to be 4% of sales, are recorded as an adjusting entry at
the end of the year.
Required:
Prepare entries to (a) record actual returns in 2024 of merchandise that was sold prior to 2024; (b) record actual returns in 2024 of
merchandise that was sold during 2024; and (c) adjust the refund liability to its appropriate balance at year end.
What is the amount of the year-end refund liability after the adjusting entry is recorded?
image

Answer & Explanation Solved by verified expert
Get Answers to Unlimited Questions

Join us to gain access to millions of questions and expert answers. Enjoy exclusive benefits tailored just for you!

Membership Benefits:
  • Unlimited Question Access with detailed Answers
  • Zin AI - 3 Million Words
  • 10 Dall-E 3 Images
  • 20 Plot Generations
  • Conversation with Dialogue Memory
  • No Ads, Ever!
  • Access to Our Best AI Platform: Flex AI - Your personal assistant for all your inquiries!
Become a Member

Other questions asked by students

Q

Consider the following hypothesis test. H0: μd ≤ 0 Ha: μd > 0 (a) The following data are from matched samples...

Basic Math
Q

What three qualities do you consider most important in a friend? What three qualities do you...

Psychology
Q

Your Turn Use the Properties of Similar Figures to write a proportion or a congruence...

Geometry
Q

Mika can eat 21 hot dogs in 6 minutes. She wants to know how many...

Basic Math
Q

Evaluate the given expression and express the result using the usual format for writing numbers...

Basic Math
Q

Acer Manufacturing Company sells a variety of sporting goods and clothing. In a back room,...

Accounting
Q

Genuine Spice Inc. began operations on January 1, 2016. The company produces a hand and...

Accounting
Q

pictures are taken in order.. A-3.1 The financial statements of Prince Albert Gold Fields...

Accounting
Q

Which of the following is true about intraperiod tax allocation? A. It is required...

Accounting
Q

Compute the MIRR statistic for Project J if the appropriate cost of capital is 10...

Finance
Q

Compare the tax consequences of a taxable asset acquisition and a Type C asset-for-stock reorganization,...

Accounting
Q

Flitter reported net income of $19,500 for the past year. At the beginning of the...

Accounting