Lacey Company recorded sales of $1,200,000 for the year ended December 31, 2020. During 2020, the company recorded actual returns and allowances of $15,000. As of December 31, 2020, Lacey estimates sales returns at 3% of current year sales. It is the companys policy to provide refunds on account. Lacey uses a perpetual inventory system and records estimated returns at the end of the period. The balance in Refund Liability is $10,800 and the balance in InventoryEstimated Returns is $4,320 on January 1, 2020. a. Prepare the journal entries to record sales in 2020 assuming all sales are on account. Cost of goods sold is 40% of the selling price.

b. Prepare the journal entries to record actual returns in 2020.

c. Prepare the adjusting entries, if any, related to estimated returns on December 31, 2020.