Question

Pharoah Choice sells natural supplements to customers with an unconditional sales return if they are not satisfied. The sales returns period extends 60 days. On February 10, 2021, a customer purchases $3200 of products (cost $1600). Assuming that based on prior experience, estimated returns are 20%. The journal entry to record the actual return of $170 of merchandise includes a__________.

Answer 1

Answer:

Explanation:

The journal entry is shown below:

Returned inventory A/c Dr $34

         To Costs of goods sold A/c $34

(Being the merchandise of return is recorded)

The computation is shown below:

= Actual return × estimated return percentage

= $170 × 20%

= $34

we simply multiply the actual return by the estimated return percentage so that actual return amount can come