A) Harwell Company manufactures automobile tires. On July 15, 2021, the company sold 2,500 tires to the Nixon Car Company for $60 each. The terms of the sale were 3/10, n/30. Harwell uses the net method of accounting for cash discounts.

Required: 1. Prepare the journal entries to record the sale on July 15 (ignore cost of goods) and payment on July 23, 2021.

- Record the sale of 2,500 tires for $60 each with a term of 3/10, n/30 under the net method of accounting for cash discounts. (Date july 15) - Record the cash collection on July 23.

Required: 2. Prepare the journal entries to record the sale on July 15 (ignore cost of goods) and payment on August 15, 2021. (Date july 15)

- Record the sale of 2,500 tires for $60 each with a term of 3/10, n/30 under the net method of accounting for cash discounts. - Record the cash collection on August 15.

B)

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 2021 with a refund liability of $330,000. During 2021, Halifax sold merchandise on account for $11,800,000. Halifax's merchandise costs is 70% of merchandise selling price. Also during the year, customers returned $345,000 in sales for credit, with $191,000 of those being returns of merchandise sold prior to 2021, and the rest being merchandise sold during 2021. Sales returns, estimated to be 3% of sales, are recorded as an adjusting entry at the end of the year. Required:

1. Prepare entries to (a) record actual returns in 2021 of merchandise that was sold prior to 2021; (b) record actual returns in 2021 of merchandise that was sold during 2021; and (c) adjust the refund liability to its appropriate balance at year end.

- Record the actual sales return of merchandise sold prior to 2021. - Record the cost of merchandise returned for goods sold prior to 2021. - Record the actual sales return of merchandise sold during 2021. - Record the cost of merchandise returned for goods sold during 2021. - Record the year-end adjusting entry for estimated returns. - Record the adjusting entry for the estimated return of merchandise to inventory.

2. What is the amount of the year-end refund liability after the adjusting entry is recorded?

What is the amount of the year-end refund liability after the adjusting entry is recorded?

	Ending balance in refund liability