Answer:
a. June 30
Dr Sales returns and allowances $1,840
Cr Sales refund payable $1,840
b. June 30
Dr Inventory returns estimated $640
Cr Cost of goods sold $640
Explanation:
a. & b. Preparation of the June 30 fiscal-year-end adjusting journal entry for future returns and allowances related to sales and cost of sales.
a. June 30
Dr Sales returns and allowances $1,840
Cr Sales refund payable $1,840
($92,000 × 2%)
(To record future returns and allowances related to sales)
b. June 30
Dr Inventory returns estimated $640
Cr Cost of goods sold $640
($32,000 × 2%)
(To record cost of sales)
a.To record expected sales to be refunded ($92,000 × 2%)
To record expected sales to be refunded= $1,840
b. To record expected cost of returns= ($32,000 × 2%)
To record expected cost of returns = $640
