Lacey Company recorded sales of $3,600,000 for the year ended December 31, 2020. During 2020, the company recorded actual returns and allowances of $45,000. 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 $32,400 and the balance in InventoryEstimated Returns is $12960 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.

. Note: If a line in a journal entry isn't required for the transaction, select "N/A" a. Account Name Dr. Cr. Accounts Receivable 3,600,000 0 Sales Revenue 0 3,600,000 To record sales Cost of Goods Sold 1,440,000 0 Inventory 0 1,440,000 To record cost of sales b. > . Dr. 45,000 0 Cr. 0 45,000 > Account Name Sales Returns Accounts Receivable To record sales returns Inventory Cost of Goods Sold To record cost of sales returns Dr. Cr. 0x 0 0 OX > C. Account Name Sales Returns Refund Liability To record estimated sales returns Inventory-Estimated Returns Cost of Goods Sold To record cost of estimated sales returns > 0 0 x 0 OX