Exercise 7-8 Sales returns [LO7-4] Halifax Manufacturing allows its customers to return merchandise for any reason up to 90 days after delivery 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 company began 2018 with an allowanc fpr sales returns of $380,000. During 2018, Halifax sold merchandise on account for $12,300,000. This merchandise cost Halifax $8610,000 70% of selling prices). Also during the year, customers returned $603,000 in sales for credit. Sales returns, estimated to be 5% of sales, are recorded as an adjusting entry at the end of the year. Required: 1. Prepare an entry to record actual merchandise returns as they occur (not adjusting the allowance for sales returns), and then record a year-end entry to adjust the allowance for sales returns to its appropriate balance 2. What is the amount of the year -end allowance for sales returns after the adjusting entry is recorded? Journal entry worksheet .1 2 34 Record the actual sales returns. Note: Enter debits before credits. Year General Journal Debit Credit 2018 Journal entry worksheet 2 4 Record the return of merchandise to stock. . Note: Enter debits before credits. Year General Journal Debit Credit 2018 Journal entry worksheet Record the year-end adjusting entry for estimated returns. . Note: Enter debits before credits. Year General Journal Debit Credit 2018 Journal entry worksheet Record the adjusting entry for the estimated return of merchandise to inventory . Note: Enter debits before credits. Year General Journal Debit Credit 2018 What is the amount of the year-end allowance for sales returns after the adjusting entry is recorded? Ending balance in allowance account