On December 10, Year 1, Cantlay Inc. made $500,000 in sales on account to various customers. The cost of the merchandise sold is $350,000. Cantlay estimates that 4% of the merchandise will be returned. Cantlay allows customers to return merchandise for a credit or refund within 30 days of purchase. On December 20, Cantlay gave $16,000 credit to various customers related to the return of merchandise. Assume that Cantlay uses a perpetual inventory system