Answer:
A.Halifax Manufacturing Journal entries
Dr Sales returns 345,000
Cr Refund liability 345,000
Dr Allowance for sales return 330,000
Cr Sales return 330,000
Dr Sales Return 339,000
Cr Allowance for sales return 339,000
Dr Inventory estimated return 237,300
Cr Cost of goods sold 237,300
B.$669,000
Explanation:
A.Calculation for sales return and allowance for sales return
(Merchandise on account for $11,800,000×Estimated sales return 3%)
= 354,000
345,000-330,000
=15,000
Hence ,
($11,800,000×3%)-15,000
354,000-15,000
=339,000
Calculation for Inventory estimated return and Cost of goods sold
237,300(339,000×70%)
B.
Beginning balance 330,000
Less Adjustment for last year 330,000
Add Current year created 354,000
($11,800,000×3%)
Less adjustment for current year 15,000
(345,000-330,000)
Ending balance in year end allowance $669,000
