Advanced Exercises and Problems Saved 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 $380,000. During 2021, Halifax sold merchandise on account for $12.300,000. Halifax's merchandise costs is 70% of merchandise selling price. Also during the year, customers returned $603,000 in sales for credit, with $333,000 of those being returns of merchandise sold prior to 2021, and the rest being merchandise sold during 2021. Sales returns, estimated to be 5% 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. 2. What is the amount of the year-end refund liability after the adjusting entry is recorded? Complete this question by entering your answers in the tabs below. Required 1 Required 2 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. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.). Help Save & Ch View transaction list Journal entry worksheet < 1 2 3 4 5 6 Record the actual sales return of merchandise sold prior to 2021. Note: Enter debits before credits. Year 2021 General Journal Debit Credit View general journal Record entry Clear entry pped Journal entry worksheet Book dinit < 1 2 3 4 5 6 ne Record the cost of merchandise returned for goods sold prior to 2021. rences Note: Enter debits before credits. Year 2021 General Journal Debit Credit View general journal Clear entry Record entry Journal entry worksheet < 1 2 3 4 5 6 Record the actual sales return of merchandise sold during 2021. Note: Enter debits before credits. Year 2021 General Journal Debit Credit Clear entry View general journal Record entry Journal entry worksheet < 1 2 3 4 5 6 Record the cost of merchandise returned for goods sold during 2021. Note: Enter debits before credits. Year 2021 General Journal Debit Credit View general journal Record entry Clear entry Journal entry worksheet < 1 2 3 4 5 6 Record the year-end adjusting entry for estimated returns. Note: Enter debits before credits. Year 2021 General Journal Debit Credit Record entry Clear entry View general journal Journal entry worksheet < 1 2 3 4 5 6 Record the adjusting entry for the estimated return of merchandise to inventory. Note: Enter debits before credits. Year 2021 General Journal Debit Credit View general journal Record entry Clear entry merchandise that was sold during 2021; and (c) adjust the refund liability to its appropriate balance at year end. 2. What is the amount of the year-end refund liability after the adjusting entry is recorded? Complete this question by entering your answers in the tabs below. Required 1 Required 2 What is the amount of the year-end refund liability after the adjusting entry is recorded? Ending balance in refund liability