Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Henderson Corp. sells merchandise for $480,000 with a cost of $216,000 in the month of June. The company estimates total returns to be equal to

Henderson Corp. sells merchandise for $480,000 with a cost of $216,000 in the month of June. The company estimates total returns to be equal to 3% of June sales. Actual returns for the month for items sold in June totaled $10,000. The credit balance in Refund Liability on June 1 is $2,400. Omit consideration of the cost of sales entry.

What is included as part of the entries to estimate returns at month-end?

A debit to refund liability for $900

A debit to sales returns for $1,980

Debit to Sales Returns for $4,400

Credit to refund liability for $2,000

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Managerial Accounting For Managers

Authors: Eric Noreen, Peter Brewer, Ray Garrison

6th Edition

1264100590, 9781264100590

More Books

Students also viewed these Accounting questions