In August, Joplin Designs sold $510,000 of merchandise; all sales were in cash.
The cost of sales for August was $400,000. Based on past experience, Joplin uses an estimated
return rate of 3% of sales. Record the
estimated returns, and cost of estimated returns for August.
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Assume that in September, Joplin Designs customers actually return
$150,000 of inventory. Using the same cost of goods sold percentage, the company
would make the following entries to record 1) the refunds and 2) cost of items returned.
Assume that in September, Joplin Designs customers actually return
$150,000 of inventory. Using the same cost of goods sold percentage, the company
would make the following entries to record 1) the refunds and 2) cost of items returned.
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