Lopez Company reports unadjusted first-year merchandise sales of $100,000 and cost of merchandise sales of $30,000. a. Compute gross profit using the unadjusted numbers above. Gross Profit $ 70,000 inces The company expects future returns and allowances equal to 5% of sales and 5% of cost of sales. b-182. Prepare the year-end adjusting entry to record the sales expected to be refunded and cost side of sales returns and allowances. Journal entry worksheet Record the adjusting entry for expected sales returns (revenue side). Note: Enter debits before credits. Transaction General Journal Debit Credit Record entry Clear entry View general journal