Answer:
A. Dec 31
Dr Sales $27,000
Cr Customer refunds payable $27,000
Dr Estimated returns inventory $16,000
Cr Cost of goods sold $16,000
B. Feb 3
Dr Customer refunds payable $5,000
Cr Cash $5,000
Dr Merchandise Inventory $3,100
Cr Estimated returns inventory $3,100
Explanation:
(a) Preparation of the adjusting entries on December 31, 20Y1, to record the expected customer returns.
Dec 31
Dr Sales $27,000
Cr Customer refunds payable $27,000
($1,800,000*1.5% )
Dr Estimated returns inventory $16,000
Cr Cost of goods sold $16,000
(b) Preparation of the entries to record the returned merchandise and cash refund to Buck Co. on February 3, 20Y2.
Feb 3
Dr Customer refunds payable $5,000
Cr Cash $5,000
Dr Merchandise Inventory $3,100
Cr Estimated returns inventory $3,100
.
