Halifax Manufacturing allows its customers to return merchandise for any reason up...
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Accounting
Halifax Manufacturing allows its customers to return merchandise for any reason up to 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 with a refund liability of $ During Halifax sold merchandise on account for $ Halifax's merchandise costs are of merchandise selling price. Also during the year, customers returned $ in sales for credit, with $ of those being returns of merchandise sold prior to and the rest being merchandise sold during Sales returns, estimated to be of sales, are recorded as an adjusting entry at the end of the year.
Required:
Prepare entries to a record actual returns in of merchandise that was sold prior to ; b record actual returns in of merchandise that was sold during ; and c adjust the refund liability to its appropriate balance at year end.
What is the amount of the yearend refund liability after the adjusting entry is recorded?
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