During 2024, its first year of operations, Ashbaugh Industries recorded sales of $21,500,000 and experienced returns of $1,450,000. Returns are accounted for as they occur, with additional estimated returns accrued at the end of the period. Cost of goods sold totaled $15,050,000 (70% of sales). The company estimates that 8% of all sales will be returned. The year-end adjusting journal entry to account for anticipated sales returns would include a:

During 2024, its first year of operations, Ashbaugh Industries recorded sales of $21,500,000 and experienced returns of $1,450,000. Returns are accounted for as they occur, with additional estimated returns accrued at the end of the period. Cost of goods sold totaled $15,050,000 (70% of sales). The company estimates that 8% of all sales will be returned. The year-end adjusting journal entry to account for anticipated sales returns would include a:

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

See similar textbooks

Similar questions

During 2021, its first year of operations, Hollis Industries recorded sales of $10,600,000 and experienced returns of $720,000. Cost of goods sold totaled $6,360,000 (60% of sales). The company estimates that 8% of all sales will be returned. Prepare the year-end adjusting journal entries to account for anticipated sales returns, assuming that all sales are made on credit and all accounts receivable are outstanding. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.)
During 2018, its first year of operations, Hollis Industries recorded sales of $10,600,000 and experienced returnsof $720,000. Cost of goods sold totaled $6,360,000 (60% of sales). The company estimates that 8% of all saleswill be returned. Prepare the year-end adjusting journal entries to account for anticipated sales returns, assumingthat all sales are made on credit and all accounts receivable are outstanding.
During 2024, its first year of operations, Hollis Industries recorded sales of $11,900,000 and experienced returns of $760,000. Cost of goods sold totaled $7,140,000 (60% of sales). The company estimates that 8% of all sales will be returned. Prepare the year-end adjusting journal entries to account for anticipated sales returns under the assumption that all sales are made for cash (no accounts receivable are outstanding). Note: If no entry is required for a transaction/event, select "No journal entry required" in the first account field. View transaction list Journal entry worksheet 1 2 Record estimated return of inventory. Note: Enter debits before credits. Transaction General Journal Debit Credit 2 Inventory-estimated returns Cost of goods sold Record entry Clear entry View general journal
Torres Corp. estimates its sales returns at the end of each month. On December 1, 2022, Torres Corp.’s “Sales Return Liability” account had a normal balance of $10,000. During December, the company had customer sales totaling $600,000 and actual returns of $12,000. At the end of December, Torres estimates sales returns related to December’s sales will be $8,000. Question: What should be the “Sales Return Liability” account balance on 12/31/22 after all entries have been made? $10,000 $8,000 $6,000 $18,000 $4,000
During 2021, its first year of operations, Hollis Industries recorded sales of $10,600,000 and experienced returns of $720,000. Cost of goods sold totaled $6,360,000 (60% of sales). The company estimates that 8% of all sales will be returned. Prepare the year-end adjusting journal entries to account for anticipated sales returns under the assumption that all sales are made for cash (no accounts receivable are outstanding). (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.)
Virginia Company recorded sales revenue of $225,000 during 2018. In the process of preparing its adjusting entries for 2018, the company estimates that 4 percent of its sales revenue will be returned by customers. If the company’s gross profit averages to be 60% of sales revenue, one of the adjusting entries will credit cost of goods sold by:
In the current year, Borden Corporation had sales of $2,000,000 and cost of goods sold of $1,200,000. Borden expects returns in the following year to equal 8% of sales. The unadjusted balance in Inventory Returns Estimated is a debit of $6,000, and the unadjusted balance in Sales Refund Payable is a credit of $10,000. The adjusting entry or entries to record the expected sales returns is (are): (A) Accounts Receivable 2,000,000 Sales 2,000,000 (B) Sales returns and allowances 150,000 Sales 150,000 Cost of Goods Sold 90,000 Inventory Returns Estimated 90,000 (C) Sales 2,000,000 Sales Refund Payable 160,000 Accounts receivable 1,840,000 Sales Refund Payable 150,0000 Accounts receivable 150,000 (D) Sales Returns and Allowances 150,000 Sales Refund Payable 150,000 Inventory Returns Estimated 90,000 Cost of goods sold 90,000
Tauros Company’s usual sales terms are net 60 days, FOB Shipping point. Sales, net of returns and allowances, totaled P2,300,000 for the year ended December 31, 2022, before year-end adjustments. Additional data are as follows: · On December 27, 2022, Taurus authorized a customer to return, for full credit, goods shipped and billed at P50,000 on December 15, 2022. The returned goods were received by Taurus on January 4, 2023, and a P50,000 credit memo was issued and recorded on the same date. · Goods with an invoice amount of P80,000 were billed and recorded on January 3, 2023. The goods were shipped on December 30, 2022. · Goods with an invoice amount of P100,000 were billed and recorded on December 30, 2022. The goods were shipped on January 3, 2023. The adjusted net sales for 2022 should be? a. 2,300,000b. 2,250,000c. 2,230,000d. 2,070,000
What is the statement of comprehensive income for the year Dec. 2020 showing the ratio of each item to sales expressed as a percentage (vertical analysis)? Additional information: • There are only 300 business days during the year. The annual amortization of long term notes is 250,000.
During its first year of operations, Purple Company recorded sales of $4,000,000. Based on industry statistics, Purple estimates 5% of all sales will be returned. Actual returns during the year totaled $160,000. The year-end adjusting journal entry to account for estimated sales returns would include a: Credit to Refund Liability of $40,000 Debit to Sales Returns of $200,000 Credit to Sales Returns of $40,000 Debit to Refund Liability of $200,000 7 DO
Webster company reported sales for 2020 of $600,000. Webster company listed $50,000 of inventory on its balance sheet. Using a 365-day year, how many days did Webster company’s inventory stay on the premises? How many times per year did Webster company inventory turnover?
In the current year, Laker Corporation had sales of $2,020,000 and cost of goods sold of $1,210,000. Laker expects returns in the following year to equal 6% of sales and 6% of cost of goods sold. The unadjusted balance in Inventory Returns Estimated is a debit of $8,000, and the unadjusted balance in Sales Refund Payable is a credit of $12,000. The adjusting entry or entries to record the expected sales returns is (are):