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Carla Vista Choice sells natural supplements to customers with an unconditional sales return if they are not satisfied. The sales returns extends 60 days.

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Carla Vista Choice sells natural supplements to customers with an unconditional sales return if they are not satisfied. The sales returns extends 60 days. On February 10, 2021, a customer purchases on account $4700 of products (cost $2350). Assuming that based on prior experience, estimated returns are 30%. The journal entry to record the expected sales return includes a O debit to Cost of Goods Sold and credit to Inventory for $2350. O debit to Cash and a credit to Sales Revenue of $4700. O credit to Estimated Inventory Returns of $705. O debit to Sales Returns and Allowance of $1410 and a credit to Allowance for Sales Returns and Allowances of $1410.

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