Customer return and refund

On December 28, 20Y3, Silverman Enterprises sold $18,000 of merchandise to Beasley Co. with terms 2/10, n/30. The cost of the goods sold was $10,200. On December 31, 20Y3, Silverman prepared its adjusting entries, yearly financial statements, and closing entries. On January 3, 20Y4, Silverman Enterprises issued Beasley Co. a credit memo for returned merchandise. The invoice amount of the returned merchandise was $4,100 and the merchandise originally cost Silverman Enterprises $2,450.

a. Journalize the entries by Silverman Enterprises to record the December 28, 20Y3 sale, using the net method under a perpetual inventory system. If an amount box does not require an entry, leave it blank.

20Y3 Dec. 28	Accounts Receivable-Beasley Co.	fill in the blank 24e63b043fd3f8a_2	fill in the blank 24e63b043fd3f8a_3
	Sales	fill in the blank 24e63b043fd3f8a_5	fill in the blank 24e63b043fd3f8a_6
20Y3 Dec. 28	Cost of Goods Sold	fill in the blank 24e63b043fd3f8a_8	fill in the blank 24e63b043fd3f8a_9
	Inventory	fill in the blank 24e63b043fd3f8a_11	fill in the blank 24e63b043fd3f8a_12

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Record the credit sale as well as the cost of the merchandise sold.

b. Journalize the entries by Silverman Enterprises to record the merchandise returned by Beasley Co. on January 3, 20Y4. If an amount box does not require an entry, leave it blank.

20Y4 Jan. 3	Customer Refunds Payable	fill in the blank 32ec98f7ffecfc9_2	fill in the blank 32ec98f7ffecfc9_3
	Accounts Receivable-Beasley Co.	fill in the blank 32ec98f7ffecfc9_5	fill in the blank 32ec98f7ffecfc9_6
20Y4 Jan. 3	Inventory	fill in the blank 32ec98f7ffecfc9_8	fill in the blank 32ec98f7ffecfc9_9
	Estimated Returns Inventory	fill in the blank 32ec98f7ffecfc9_11	fill in the blank 32ec98f7ffecfc9_12

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To record a customer refund, a liability account to estimate refunds that will be paid to customers is used. Depending on whether the customer has paid for the merchandise, a cash refund or credit memo will be issued.

c. Journalize the entry to record the receipt of the amount due by Beasley Co. on January 7, 20Y4. If an amount box does not require an entry, leave it blank.

20Y4 Jan. 7	Cash	fill in the blank 928c3dff8fdcfa4_2	fill in the blank 928c3dff8fdcfa4_3
	Accounts Receivable-Beasley Co.	fill in the blank 928c3dff8fdcfa4_5	fill in the blank 928c3dff8fdcfa4_6

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To record returned inventory, a current asset account for the estimated amount of merchandise that will be returned by customers is used.

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Partially correct