In its first year of business, Borden Corporation had sales of $2,000,000 and cost of goods sold of $1,200,000. Borden expects returns in the following year to equal 8% of sales. The adjusting entry or entries to record the expected sales returns is (are):

• A.
• Sales2,000,000Sales Refund Payable160,000Accounts receivable1,840,000
• B.
• Accounts Receivable2,000,000Sales2,000,000
• C.
• Sales Returns and Allowances160,000Sales Refund Payable160,000Inventory Returns Estimated96,000Cost of goods sold96,000
• D.
• Sales returns and allowances160,000Sales160,000Cost of Goods Sold96,000Inventory Returns Estimated96,000
• E.
• Sales Refund Payable160,000Accounts receivable160,000