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17. On June 30,2020, Chelsea Inc, sold merchandise for $1,500 on credit terms 2/10, n/30. Chelsea accounts for sales discounts using the net method. The

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17. On June 30,2020, Chelsea Inc, sold merchandise for $1,500 on credit terms 2/10, n/30. Chelsea accounts for sales discounts using the net method. The customer paid the balance fin full on July 28 , 2020. Choose the correct statement which describes Chelsea's accounting for this transaction. A). On June 30. Cholsea would debit Accounts Receivable for $1,500. B) On July 28, Chelsea would credit sales for $30. C) On July 28, the net impact of the journal entry would be to increase assets by $30 and increase equity by $30 (D) After all of the entries, net sales would be recognized for $1,500. E) None of the above. 18. Five Hands Inc, sells merchandise for $50,000 for the month of June. The company estimates returns to be equal to 2.5% of sales. Actual returns for the month for items sold in June totaled $500. What is the correct balance in Refund Liability on June 30 based on these transactions? A) $20 B) $1,250 C) $750 D) $500 19. Six Sisters Inc. Sells merchandise for $480,000 with a cost of $216,000 in the month of June. The company estimates returns to be equal to 3% of sales. Actual returns for the month for items sold in June totaled $10,000. The unadjusted credit balance in Refund Llability on June 30 is $2,400 and the unadjusted debit balance in Inventory-Estimated Returns is $1,080. What is included as part of the entries to estimate returns at month-end? A) A debit to Sales Returns for $4,400. B) A debit to Inventory-Estimated Returns for $1,980. C) A debit to Cost of Goods Sold for $900. D) A credit to Refund Liability for $2,000. 20. When the allowance method of recognizing doubtful accounts is used, the entrics to record collection of a small account previously written off would (a) Increase the allowance for doubtful accounts. B) Increase net incomo. C) Decrease the allowance for doubtful accounts. D) Have no effect on the allowance for doubtfulaccounts

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