Business, 07.04.2020 23:33 Bri0929

Halifax Manufacturing allows its customers to return merchandise for any reason up to 90 days after delivery and receive a credit to their accounts. All of Halifax's sales are for credit (no cash is collected at the time of sale). The company began 2018 with an allowance for sales returns of $420,000. During 2018, Halifax sold merchandise on account for $12,700,000. This merchandise cost Halifax $7,620,000 (60% of selling prices). Also during the year, customers returned $619,000 in sales for credit. Sales returns, estimated to be 5% of sales, are recorded as an adjusting entry at the end of the year.

Prepare entries to (a) record actual returns in 2018 of merchandise that was sold prior to 2018; (b) record actual returns in 2018 of merchandise that was sold during 2018; and (c) adjust the refund liability to its appropriate balance at year end. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.)

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Halifax Manufacturing allows its customers to return merchandise for any reason up to 90 days after...

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