Merchandise Inventory Adjustments: Periodic Inventory system with Sales Returns and Allowances

The following partial work sheet is taken from Karens Gift Shop for the year ended December 31, 20--. The ending merchandise inventory is $59,000. Karen estimates that customers will be granted $14,500 in refunds next year for merchandise sold this year. The estimated cost of the returned inventory is $9,000.

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1. Complete the Adjustments columns for Merchandise Inventory and related accounts.

2. Extend all accounts to the Adjusted Trial Balance columns.

Karens Gift Shop End-of-Period Spreadsheet (Partial) For Year Ended December 31, 20--
ACCOUNT TITLE	TRIAL BALANCE			ADJUSTMENTS			ADJUSTED TRIAL BALANCE
	DEBIT	CREDIT		DEBIT	CREDIT		DEBIT	CREDIT
Merchandise Inventory	50,000.00			fill in the blank 5ef0cf01cfdf065_1	fill in the blank 5ef0cf01cfdf065_2		fill in the blank 5ef0cf01cfdf065_3	fill in the blank 5ef0cf01cfdf065_4
Estimated Returns Inventory	10,000.00			fill in the blank 5ef0cf01cfdf065_5	fill in the blank 5ef0cf01cfdf065_6		fill in the blank 5ef0cf01cfdf065_7	fill in the blank 5ef0cf01cfdf065_8
Customer Refunds Payable		11,000.00		fill in the blank 5ef0cf01cfdf065_9	fill in the blank 5ef0cf01cfdf065_10		fill in the blank 5ef0cf01cfdf065_11	fill in the blank 5ef0cf01cfdf065_12
Income Summary				fill in the blank 5ef0cf01cfdf065_13	fill in the blank 5ef0cf01cfdf065_14		fill in the blank 5ef0cf01cfdf065_15	fill in the blank 5ef0cf01cfdf065_16
				fill in the blank 5ef0cf01cfdf065_17	fill in the blank 5ef0cf01cfdf065_18		fill in the blank 5ef0cf01cfdf065_19	fill in the blank 5ef0cf01cfdf065_20
Sales		257,000.00		fill in the blank 5ef0cf01cfdf065_21	fill in the blank 5ef0cf01cfdf065_22		fill in the blank 5ef0cf01cfdf065_23	fill in the blank 5ef0cf01cfdf065_24
Sales Returns & Allowances	16,000.00			fill in the blank 5ef0cf01cfdf065_25	fill in the blank 5ef0cf01cfdf065_26		fill in the blank 5ef0cf01cfdf065_27	fill in the blank 5ef0cf01cfdf065_28
Purchases	198,000.00			fill in the blank 5ef0cf01cfdf065_29	fill in the blank 5ef0cf01cfdf065_30		fill in the blank 5ef0cf01cfdf065_31	fill in the blank 5ef0cf01cfdf065_32
Purchases Returns & Allowances		3,500.00		fill in the blank 5ef0cf01cfdf065_33	fill in the blank 5ef0cf01cfdf065_34		fill in the blank 5ef0cf01cfdf065_35	fill in the blank 5ef0cf01cfdf065_36
Purchases Discounts		3,000.00		fill in the blank 5ef0cf01cfdf065_37	fill in the blank 5ef0cf01cfdf065_38		fill in the blank 5ef0cf01cfdf065_39	fill in the blank 5ef0cf01cfdf065_40
Freight-In	1,000.00			fill in the blank 5ef0cf01cfdf065_41	fill in the blank 5ef0cf01cfdf065_42		fill in the blank 5ef0cf01cfdf065_43	fill in the blank 5ef0cf01cfdf065_44

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3. Prepare the cost of goods sold section from the spreadsheet.

Karen's Gift Shop Income Statement For Year Ended December 31, 20--

Cost of goods sold:
Merchandise inventory, December 31Merchandise inventory, January 1Purchases discountsPurchases returns and allowances		$- Select -
Estimated returns inventory, January 1Estimated returns inventory, December 31Purchases discountsPurchases returns and allowances		- Select -	$- Select -
Freight-inMerchandise inventory, December 31Merchandise inventory, January 1Purchases		$- Select -
Less: Freight-inLess: Merchandise inventory, December 31Less: Merchandise inventory, January 1Less: Purchases returns and allowances	$- Select -
Less: Freight-inLess: Goods available for saleLess: Merchandise inventory, December 31Less: Purchases discounts	- Select -	- Select -
Cost of goods available for saleEstimated returns inventory, January 31Net purchasesMerchandise inventory, January 31		$- Select -
Add: Freight-inAdd: Merchandise inventory, December 31Add: Purchases returns and allowancesAdd: Purchases		- Select -
Cost of goods available for saleCost of goods purchasedPurchases discountsPurchases returns and allowances			- Select -
Cost of goods available for saleCost of goods purchasedMerchandise inventory, January 1Purchases discounts			$- Select -
Less: Freight-inLess: Merchandise inventory, December 31Less: Merchandise inventory, January 1Less: Purchases returns and allowances		$- Select -
Less: Freight-inLess: Estimated returns inventory, December 31Less: Estimated returns inventory, January 1Less: Purchases returns and allowances		- Select -	- Select -
Cost of goods sold				$fill in the blank a78925097000fd2_26