Adjustments for a Merchandising Business: Perpetual Inventory System with Sales Returns and Allowances A partial Trial Balance for Curless Company as of December 31, 20-- is shown. Curless Company Partial Trial Balance For Year Ended December 31, 20-- ACCOUNT TITLE DEBIT BALANCE CREDIT BALANCE Merchandise Inventory 148,000.00   Estimated Returns Inventory 800.00   Customer Refunds Payable   350.00 Sales   426,000.00 Sales Returns and Allowances 20,000.00   Cost of Goods Sold 291,000.00   Curless has made the following estimates for next year: Sales made this year of $5,800 will be returned next year and customers will be granted full refunds. The estimated cost of the inventory sold this year and expected to be returned by customers next year is $6,900. Open T accounts and enter the balances for the above accounts. Make appropriate adjustments to the T accounts. For grading purposes use the labels shown. TB Trial balance (beginning balance) ATB Adjusted trial balance (ending balance) (1) Adjust the liability for refunds to the current estimate. (2) Adjust Estimated Returns Inventory to the current estimate.

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
icon
Related questions
icon
Concept explainers
Question

Adjustments for a Merchandising Business: Perpetual Inventory System with Sales Returns and Allowances

A partial Trial Balance for Curless Company as of December 31, 20-- is shown.

Curless Company
Partial Trial Balance
For Year Ended December 31, 20--
ACCOUNT TITLE DEBIT BALANCE CREDIT BALANCE
Merchandise Inventory 148,000.00  
Estimated Returns Inventory 800.00  
Customer Refunds Payable   350.00
Sales   426,000.00
Sales Returns and Allowances 20,000.00  
Cost of Goods Sold 291,000.00  

Curless has made the following estimates for next year:

  • Sales made this year of $5,800 will be returned next year and customers will be granted full refunds.
  • The estimated cost of the inventory sold this year and expected to be returned by customers next year is $6,900.

Open T accounts and enter the balances for the above accounts. Make appropriate adjustments to the T accounts.

For grading purposes use the labels shown.

TB Trial balance (beginning balance)
ATB Adjusted trial balance (ending balance)
(1) Adjust the liability for refunds to the current estimate.
(2) Adjust Estimated Returns Inventory to the current estimate.

 

Assets
Owner's Equity
Merchandise Inventory
Revenues
Sales
Estimated Returns Inventory
Sales Returns and Allowances
Liabilities
Customer Refunds Payable
Expenses
Cost of Goods Sold
Owner's Equity
Revenues
Sales
Transcribed Image Text:Assets Owner's Equity Merchandise Inventory Revenues Sales Estimated Returns Inventory Sales Returns and Allowances Liabilities Customer Refunds Payable Expenses Cost of Goods Sold Owner's Equity Revenues Sales
Expert Solution
trending now

Trending now

This is a popular solution!

steps

Step by step

Solved in 2 steps

Blurred answer
Follow-up Questions
Read through expert solutions to related follow-up questions below.
Follow-up Question

how do you get $6100 in estimated return inventory?

Solution
Bartleby Expert
SEE SOLUTION
Knowledge Booster
Completing the Accounting Cycle
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.
Similar questions
Recommended textbooks for you
FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
Accounting
ISBN:
9781259964947
Author:
Libby
Publisher:
MCG
Accounting
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Horngren's Cost Accounting: A Managerial Emphasis…
Horngren's Cost Accounting: A Managerial Emphasis…
Accounting
ISBN:
9780134475585
Author:
Srikant M. Datar, Madhav V. Rajan
Publisher:
PEARSON
Intermediate Accounting
Intermediate Accounting
Accounting
ISBN:
9781259722660
Author:
J. David Spiceland, Mark W. Nelson, Wayne M Thomas
Publisher:
McGraw-Hill Education
Financial and Managerial Accounting
Financial and Managerial Accounting
Accounting
ISBN:
9781259726705
Author:
John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting Principles
Publisher:
McGraw-Hill Education