Hahn Flooring Company uses a perpetual Inventory system. Journalize the December 31 adjusting entries based upon the following: a. The inventory account has a balance of $1,339,400, while physical inventory indicates that $1,300,300 of merchandise is on hand. Assume any shrinkage is a normal amount. If an amount box does not require an entry, leave it blank. Dec. 31 Accounts Payable b. Sales returns of $258,050 and merchandise returns of $79,250 are estimated for the current year's sales. If an amount box does not require an entry, leave it blank. Dec. 31 Feedback Check My Work b. At the end of an accounting period, sellers are required to estimate returns and allowances. Two entries are required. The first reduces Sales account and increases a Customer Refunds Payable account for the estimated returns and allowances to be given to customers in the future. The second creates an Estimated Returns Inventory account and reduces the Cost of Goods Sold account for the cost of the merchandise expected to be returned. Previous Next > Check My Work 1 more Check My Work uses remaining All work saved Save and Exit Submit Assignment for Grading