Adjustments for Merchandise Inventory Using T Accounts: Periodic Inventory System with Sales Returns and Allowances

Sam Edwards owns a business called Sam's stuff. If physical count determines his ending inventory as of December 31, 20-- was $72,000. Based on past experience, Sam estimates that $5000 of sales from this year will be returned next year. The cost of merchandise expected to be returned is $3000. Using the partial Trial Balance provided below, set up T account for Merchandise Inventory, Estimated Returns Inventory, Customer Refunds Payable, Sales Returns and Allowances, and Income Summary and prepare the year and adjustment for Merchandise Inventory and related accounts.

Adjustment for Merchandise Inventory Using Accounts: Periodic Inventory System with Sales Returns and Allowances Sam Edwards owns a business called Sam's Stuff. A physical count determined his ending Inventory as of December 31, 20.- was $72,000. Based on past experience, Sam estimates that $5,000 of sales from this year will be returned next year. The cost of the merchandise expected to be returned is $3,000. Using the partial Trial Balance provided below, set up T accounts for Merchandise Inventory, Estimated Returns Inventory. Customer Refunds Payable, Sates Returns and Allowances, and Income Summary and prepare the year-end adjustments for Merchandise Inventory and related accounts. TRIAL BALANCE (PARTIAL) DEBIT CREDIT Merchandise Inventory 60,000.00 Estimated Returns Inventory 2,500.00 Customer Refunds Payable 4,000.00 Sales Returns and Allowances 20,000.00 Income Summary For grading purposes use the labels shown and enter transactions in alphabetical order. TB Trial balance (beginning balance) ATB Adjusted trial balance (ending balance) (a) Remove the beginning balance in merchandise inventory. (b) Add the new balance per the physical count. (c) Adjust the customer refunds balance to the new estimate of next year returns (use one adjusting entry) (d) Remove the beginning balance in estimated returns inventory () Add the new balance per the estimate of merchandise expected to be returned Assets Check My Work 3 more Check My Work uses remaining Next Adjustment for Merchandise Inventory Using Accounts: Periodic Inventory System with Sales Returns and Allowances Sam Edwards owns a business called Sam's Stuff. A physical count determined his ending Inventory as of December 31, 20.- was $72,000. Based on past experience, Sam estimates that $5,000 of sales from this year will be returned next year. The cost of the merchandise expected to be returned is $3,000. Using the partial Trial Balance provided below, set up T accounts for Merchandise Inventory, Estimated Returns Inventory. Customer Refunds Payable, Sates Returns and Allowances, and Income Summary and prepare the year-end adjustments for Merchandise Inventory and related accounts. TRIAL BALANCE (PARTIAL) DEBIT CREDIT Merchandise Inventory 60,000.00 Estimated Returns Inventory 2,500.00 Customer Refunds Payable 4,000.00 Sales Returns and Allowances 20,000.00 Income Summary For grading purposes use the labels shown and enter transactions in alphabetical order. TB Trial balance (beginning balance) ATB Adjusted trial balance (ending balance) (a) Remove the beginning balance in merchandise inventory. (b) Add the new balance per the physical count. (c) Adjust the customer refunds balance to the new estimate of next year returns (use one adjusting entry) (d) Remove the beginning balance in estimated returns inventory () Add the new balance per the estimate of merchandise expected to be returned Assets Check My Work 3 more Check My Work uses remaining Next