8. Galaxy sells used videogames for cash and provides a one-week return right. Returns are material and reasonably predictable. Galaxy should:

a) Not record sales until the right to return has expired

b) Record a contra-receivable in the year of the sale

c) Recognize a fund liability associated with estimated returns

d) Credit sales in the period of the return

11. Rusty Hardware makes only cash sales. It began 2016 with a credit balance of $32,000 in the refund liability account. Sales during 2016 were $600,000. Rusty estimates that 6% of all sales will be returned. During 2016, customers returned merchandise for credit of $28,000 to their accounts. What is the balance in the allowance for sales returns account at the end of 2016?

a) $32,000

b) $39,000

c) $43,000

d) $40,000