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During 2024, its first year of operations, Ashbaugh Industries recorded sales of $21,200,000 and experienced returns of $1,250,000. Returns are accounted for as they
During 2024, its first year of operations, Ashbaugh Industries recorded sales of $21,200,000 and experienced returns of $1,250,000. Returns are accounted for as they occur, with additional estimated returns accrued at the end of the period. Cost of goods sold totaled $14,840,000 (70% of sales. The company estimates that 7% of all sales will be returned. The year-end adjusting journal entry to account for anticipated sales returns would include a Multiple Choice Credit to refund liability of $234.000 Debit to cost of sales of $1,484,000 Credit to sales returns of $234.000 Debit to sales returns of $1,484,000
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