Answer
The answer and procedures of the exercise are attached in the following archives.
Explanation
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I'm going to guess, but i would say the best answer would be B. They could file for Chapter 7 bankruptcy and discharge most of their debt.
Answer:
Hello, good morning. How's your day so far? thats the answer
Answer:
B) Credit to refund liability of $280,000
Explanation:
The total estimated returns are 85 of the total sales = 8% x $21,000,000 = $1,680,000.
Since the company had already accounted for $1,400,000 in returns, the adjusted necessary should be = total returns - accounted returns = $1,680,000 - $1,400,000 = $280,000
Since the refund liability account must increase, and it is a liability account, it should be credited.
