Graw Hill Delfax Manufacturing allows its collected at the time of sale). The company began y cost Delfax eive a credit to their accounts. All of Delfax's sales are for credit (no cash is ear 1 with an allowance for sales returns of customers to return merchandise for any reason up to 90 days ng year 1, Delfax sold merchandise on account for $12,000,000. This merchandise 38,400,000 (70% of selling prices). Also during the year, customers returned $400,000 or credit. Sales returns, estimated to be 5% of sales, are recorded as an adjusting entry at in sales f the end of the year. Required: 1. Prepare the entry to record the merchandise returns and the year-end adjusting entry for What is the amount of the year-end allowance for sales returns after the adjusting entry is recorded? estimated returns. 2