Answered step by step
Verified Expert Solution
Link Copied!
Question
1 Approved Answer

Exercise 7 - 9 ( Static ) Sales returns [ LO 7 - 4 ] Halfax Manufacturing allows its customers to return merchandise for any

Exercise 7-9(Static) Sales returns [LO7-4]
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 $300.000. During
Halifax sold merchandise on account for $11,500.000. Halifax's merchandise costs it 65% of merchandise selling price. Also
during the yesr, customers returned $450.000 in sales for credit, with $250.000 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?
image text in transcribed

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image
Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image_2

Step: 3

blur-text-image_3

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Cost Accounting A Managerial Emphasis

Authors: Charles T. Horngren, George Foster, Srikant M. Datar

9th Edition

0306457229, 978-0306457227

More Books

Students explore these related Accounting questions