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 2018 with a refund liability of $450,000. During 2018, Halifax sold merchandise on account for $13,000,000. Halifax's merchandise costs it 65% of merchandise selling price. Also during the year, customers returned $514,000 in sales for credit, with $283,000 of those being returns of merchandise sold prior to 2018, and the rest being merchandise sold during 2018. Sales returns, estimated to be 4% of sales, are recorded as an adjusting entry at the end of the year. Required: 1. Prepare entries to (a) record actual returns in 2018 of merchandise that was sold prior to 2018: (b) record actual returns in 2018 of merchandise that was sold during 2018, 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 Prepare entries to (a) record actual returns in 2018 of merchandise that was sold prior to 2018; (b) record actual returns in 2018 of merchandise that was sold during 2018; and (c) adjust the refund liability to its appropriate balance at year end. (If no entry is required for a transaction/event, select "No journal entry required in the first account field.) No General Journal Credit Year 2018 Debit 283,000 Refund liability Accounts receivable 283,000 2018 183,950 Inventory Inventory estimated returns 183.950 2018 6,000 Sales returns Accounts receivable 6,000 Requiedi Required 2 > 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 2018 with a refund liability of $450,000. During 2018, Halifax sold merchandise on account for $13,000,000. Halifax's merchandise costs it 65% of merchandise selling price. Also during the year, customers returned $514.000 in sales for credit with $283.000 of those being returns of merchandise sold prior to 2018, and the rest being merchandise sold during 2018. Sales returns, estimated to be 4% of sales, are recorded as an adjusting entry at the end of the year. Required: 1. Prepare entries to (a) record actual returns in 2018 of merchandise that was sold prior to 2018; (b) record actual returns in 2018 of merchandise that was sold during 2018, 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 Reed
