Answer:
Explanation:
The journal entry is shown below:
(A) Sales return and allowance A/c Dr $450,000
To Accounts receivable $450,000
(being returned goods recorded)
Merchandise inventory A/c Dr $292,500 ($450,000 × 65%)
To Cost of goods sold $292,500
(Being cost of goods sold recorded)
The computation of the estimated return is shown below:
= Sale value of merchandise × return percentage - actual return
= $11,500,000 × 4% - $450,000
= $460,000 - $450,000
= $10,000
(B) Sales return and allowance A/c Dr $10,000
To Accounts receivable $10,000
(being returned goods recorded)
Merchandise inventory A/c Dr $6,500 ($10,000 × 65%)
To Cost of goods sold $6,500
(Being cost of goods sold recorded)
The computation of the year-end allowance for sales returns is shown below:
The amount is same $6,500
