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 recelve 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 allowance for sales returns of $380.000. During 2018, Halifax sold merchandise on account for $12,300,000. This merchandise cost Halifax $8,610,000 (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? Complete this question by entering your answers in the tabs below. Required 1 Required 2 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. (If no entry is required for a transaction/event, select "No journal entry required in the first account field.) View transaction list View journal entry worksheet General Journal Credit No 1 Year 2018 Debit 803,000 Sales returns Accounts receivable 803.000 2018 Sales returns Allowance for sales returns Required 1 Required 2 > Required 1 Required 2 What is the amount of the year-end allowance for sales returns after the adjusting entry is recorded? Ending balance in allowance account