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Rus_ich [418]
3 years ago
9

In its first year of business, Borden Corporation had sales of $2,040,000 and cost of goods sold of $1,220,000. Borden expects r

eturns in the following year to equal 7% of sales. The adjusting entry or entries to record the expected sales returns is_________________.
Business
1 answer:
nordsb [41]3 years ago
6 0

The entries are as follows

<u>To record estimated returns on Sales</u>

Debit: Sales Refund Payable Account $142,800

Credit: Accounts Receivables $142,800

<u>To record estimated Cost of Sales returns</u>

Debit: Inventory Returns Estimated Account $85,400

Credit: Inventory on Sales on Returns $85,400

<u>Explanation:</u>

<u>To derive the figure for Sales Refund payable for the year</u>

7% of $2,040,000

=7/100*2040000= $142,800

<u>To derive the figure for Inventory cost on Sales Refund payable for the year </u>

7% of $1,220,000

=7/100*1220000

= $85400

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