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 2024 with a refund liability of $360,000. During 2024, Halifax sold merchandise on account for $12,100,000. Halifax's merchandise costs are 70% of merchandise selling price. Also during the year, customers returned $594,000 in sales for credit, with $328,000 of those being returns of merchandise sold prior to 2024, and the rest being merchandise sold during 2024. Sales returns, estimated to be 5% of sales, are recorded as an adjusting entry at the end of the year.

1. Record the year-end adjusting entry for estimated returns.

2. Record the adjusting entry for the estimated returns of merchandise to inventory.

3. What is the amount of the year-end refund liability after the adjusting entry is recorded?