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omeli [17]
3 years ago
14

Halifax Manufacturing allows its customers to return merchandise for any reason up to 90 days after delivery and receive a credi

t to their accounts. All of Halifax's sales are for credit (no cash is collected at the time of sale). The company began 2020 with an allowance for sales returns of $200,000. During the year, Halifax sold merchandise on account for $12,000,000. This merchandise cost Halifax $8,520,000. Also during the year, customers returned $450,000 in sales for credit. Sales returns, estimated to be 4% of sales, are recorded as an adjusting entry at the end of the year.
Required:
1.
Prepare the entry to record the merchandise returns and the year-end adjusting entry for estimated returns. Note: Record the estimated returns at net amounts.

2.
What is the amount of the year-end allowance for sales returns after the adjusting entry is recorded?
Business
1 answer:
Mice21 [21]3 years ago
8 0

Answer and Explanation:

The Journal entry is shown below:-

1.

a. Sales return Dr,  $450,000

         To Accounts receivable  $450,000

(Being the actual sales returns is recorded)

b. Merchandise inventory Dr, $8,520,000

          To cost of goods sold $8,520,000

(Being the return of merchandise of stock is recorded)

c. Sales return Dr, $30,000

($12,000,000 × 4%) - $450,000

           To Allowance for sales return $30,000

(Being adjustment entry for estimated return is recorded)

d. Inventory estimated returns Dr, $30,000

($12,000,000 × 4%) - $450,000

            To cost of goods sold $30,000

(Being estimated return of merchandise inventory of merchandise to inventory is recorded)

2. The amount of the year-end allowance for sales returns is shown below:-

Beginning balance                             $200,000

Add:

Estimated returns during the year    $480,000

($12,000,000 × 4%)

Less:

Actual returns                                    $450,000

Ending balance                                 $230,000

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USPshnik [31]

Answer:

$12,280,000.

Explanation:

All the direct costs involved in the manufacturing of a product except fixed cost is called prime cost e.g direct material, direct labor etc.

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Total Prime cost = Direct material + Direct labor = $4,200,000 + $8,080,000 = $12,280,000

Overhead costs are not classified as the prime cost because these are indirect costs.

4 0
3 years ago
Consumers regard Dell computers and Apple computers as substitutes. If the price of a Dell computer decreases, the A. supply of
prohojiy [21]

Answer:

<em>B. demand for Apple computers decreases.</em>

Explanation:

If two things are substitute of each and other, that generally in simple words means either this or this. As we can see in the statements that has been provided in the question that Dell and Apple computers are substitute of each other, <em>so if the amount from Dell computer decreases then the demand of the computers made by Apple company will absolutely decrease. </em>

Because two devices which carries almost same qualities and features are also substitute of each other, i<em>f price of one device from the both substitutes will decrease, everyone will rush to buy the device with low price and the device with high price will get less popular among the consumers.</em> So, this is the reason which says OPTION(B) is the correct answer.

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PLEASE HELP ASAP!! CORRECT ANSWER ONLY PLEASE!!!Type the CORRECT answer in the box.
Mariulka [41]

Answer:

105.88

Explanation:

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CPI = Current year price / base year price x 1000

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7 0
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Over the years, O'Brien Corporation's stockholders have provided $20,000,000 of capital, when they purchased new issues of stock
shepuryov [24]

Answer:

$13,000,000

Explanation:

Given that,

Total Book Value of Equity = $20,000,000

Common stock outstanding = 1,000,000 shares

Selling price per share = $33.00

Market value of equity:

= Selling price per share × Shares outstanding

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O'Brien's MVA:

= Market value of equity - Total Book Value of Equity

= $33,000,000 - $20,000,000

= $13,000,000

3 0
3 years ago
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