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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

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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? % Answer is complete but not entirely correct. 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 returns in No Year General Journal Debit Credit 1 2021 Refund liability 342,000 Accounts receivable 342.000 2 2021 205,200 Inventory Inventory-estimated returns 205 200 3 2021 Sales returns 348,000 X Accounts receivable 348,000 4 2021 208,800 Inventory Cost of goods sold 208.800 x 5 2021 Sales returns 557,000 Refund liability 557.000 x 6 2021 334 200 Inventory-estimated returns Cost of goods sold 334 200 X 2. What is the amount of the year-end refund liability after the adjusting entry is recorded? * Answer is complete but not entirely correct. 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 $ 635,000 X

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