Exercise $7-9($Static$)$ Sales returns $[$LO$7-4]$

Halfax Manufacturing allows its customers to return merchandise for any reason 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 compony began $2024$ with a refund liability of $$300\mathrm{.}000.$ During

Halifax sold merchandise on account for $$11,500\mathrm{.}000.$ Halifax's merchandise costs it $65\%$ of merchandise selling price. Also

during the yesr, customers returned $$450\mathrm{.}000$ in sales for credit, with $$250\mathrm{.}000$ of those being returns of merchsndise sold prior to

$2024,$ and the rest being merchandise sold during $2024.$ Sales returns, estimated to be $4\%$ of sales, are recorded as an adjusting entry

at the end of the year.

Requlred:

Prepare entries to $($a$)$ record actual returns in $2024$ of merchandise that was sold prior to $2024$; $($b$)$ record actual retums in $2024$

of merchandise that was sold cluring $2024$; and $($c$)$ adjust the refund liability to its appropriate balance at year end.

What is the amount of the year$-$end refund liability after the adjusting entry is recorded?

Answer is complete but not entirely correct.

Complete this question by entering your answers in the tabs below.

Prepare entries to $($a$)$ record actual returns in $2024$ of merchandise that was sold pricr to $2024$; $($b$)$ record actual returns in

$2024$ of merchandise that was sold during $2024$; and $($c$)$ adjust the refund liability to its appropriate balance at year end.

Noter If no entry is required for a transaction$/$event$,$ select $"$No journal entry required" in the first account field.

What is the amount of the year$-$end refund liability after the adjusting entry is recorded?