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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?
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