During 2021, its first year of operations, Hollis Industries recorded sales of $10,600,000 and experienced returns of $720,000. Cost of goods sold totaled $6,360,000 (60% of sales). The company estimates that 8% of all sales will be returned.

Prepare the year-end adjusting journal entries to account for anticipated sales returns, assuming that all sales are made on credit and all accounts receivable are outstanding.(If no entry is required for a transaction/event, select "No journal entry required" in the first account field.)

Required

1. Record the journal entry for anticipated sales returns.
2. record estimated return of inventory