John is the owner of a clothing brand. It is year-end at December 31 2021 and he hired your accountant services to review his books. You noted a trend in his books that a portion of his total sales in December are returned throughout Q1 of next year (January to March).

Using the help of his staff. you organized receipts and data. the following data was found regarding sales and sales returns: 2019 December month Total Sales: 492,806 December 2019 sales-related returns in Q1 2020: 21,130.40 2020 December month Total Sales: 517,419 December 2020 sales-related returns in Q1 2021: 19,671

1a) John needs to accrue an estimation on how many of the year-end sales will be returned (the next fiscal year), what will be that estimation?

1b) What accrual policy for sales will you suggest to John?

1c) what liability will you recommend him to create for year-end? Provide relevant calculations and any journal entries required.