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 2021 with a refund liability of $420,000. During 2021, Halifax sold merchandise on account for $12,700,000. Halifax's merchandise costs is 60% of merchandise selling price. Also during the year, customers returned $619,000 in sales for credit with $342.000 of those being returns of merchandise sold prior to 2021, and the rest being merchandise sold during 2021. Sales returns, estimated to be 5% of sales, are recorded as an adjusting entry at the end of the year Required: 1. Prepare entries to (a) record actual returns in 2021 of merchandise that was sold prior to 2021. (b) record actual returns in 2021 of merchandise that was sold during 2021; and (c) adjust the refund liability to its appropriate balance at year end. 2. What is the amount of the year-end refund liability after the adjusting entry is recorded? 3 Answer is not complete. Complete this question by entering your answers in the tabs below. Required 1 Required 2 Prepare entries to (a) record actual returns in 2021 of merchandise that was sold prior to 2021. (b) record actual retums in 2021 of merchandise that was sold during 2021; and adjust the refund liability to its appropriate balance at year and no entry is required for a transaction event, select To Journal entry required in the first account fold.) Year General Journal Credit 2021 Refund ability Debit 342.000 ACCOUS receivable 342.000 Required 1 Required 2 Prepare entries to (a) record actual returns in 2021 of merchandise that was sold prior to 2021; (b) record actual returns 2021 of merchandise that was sold during 2021; and (c) adjust the refund liability to its appropriate balance at year end no entry is required for a transaction/event, select "No journal entry required" in the first account field.) No Year 2021 General Journal Refund liability Accounts receivable Credit Debit 342,000 342.000 2021 Inventory Inventory-estimated returns 205 200 205.200 2021 Sales returns Accounts receivable 277.000 277.000 2021 Inventory Cost of goods sold 166 200 166 200 2021 Sales returns Refund liability 00 00 00 00 543 150 > 543 150 2021 inventory-estimated returns Cost of goods sold Required 2 Check my work mode: This shows what is correct or incorrect for the work you have completed so far, it does not Halifax Manufacturing allows its customers to retum 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 2021 with a refund liability of $420,000. During 2021, Halifax sold merchandise on account for $12.700.000. Halifax's merchandise costs is 60% of merchandise selling price. Also during the year, customers returned $619,000 in sales for credit with $342,000 of those being returns of merchandise sold prior to 2021, and the rest being merchandise sold during 2021. Sales returns, estimated to be 5% of sales, are recorded as an adjusting entry at the end of the year. Required: 1. Prepare entries to (a) record actual returns in 2021 of merchandise that was sold prior to 2021: (b) record actual returns in 2021 of merchandise that was sold during 2020 and (c) adjust the refund liability to its appropriate balance at year end. 2. What is the amount of the year-end refund liability after the adjusting entry is recorded? Answer is not complete. Complete this question by entering your answers in the tabs below. Required 1 Required 2 What is the amount of the year-end refund liability after the adjusting entry is recorded Ending balance in refund liability
