On March 10, 2020, Indigo Company sold to Barr Hardware 200 tool sets at a price of $51 each (cost $28 per set) with terms of n/60,fo.b. shipping point. Indigo allows Barr to return any unused tool sets within 60 days of purchase. Indigo estimates that (1) 10 sets will be returned, (2) the cost of recovering the products will be immaterial, and (3) the returned tools sets can be resold at a profit. On March 25, 2020, Barr returned 6 tool sets and received a credit to its account. (a) Your answer is correct. Prepare journal entries for Indigo to record (1) the sale on March 10, 2020, (2) the return on March 25, 2020, and (3) any adjusting entries required on March 31, 2020 (when Indigo prepares financial statements). Indigo believes the original estimate of returns is correct. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No entry" for the account titles and enter for the amounts.) Debit Credit 10200 No. Account Titles and Explanation (1) Accounts Receivable Sales Revenue (To record sales) Cost of Goods Sold 10200 5,600 5,600 Inventory (To record cost of goods sold) Sales Returns and Allowances (2) 306 306 Accounts Receivable (To record sales returns) Returned Inventory 168 168 (3) 204 Cost of Goods Sold (To record cost of goods returned) Sales Returns and Allowances Allowance for Sales Returns and Allowances (Adjusting entry for sales returns) Estimated Inventory Returns 204 112 112 Cost of Goods Sold (Adjusting entry for cost of goods sold) (b) Indicate the income statement and balance sheet reporting by Indigo at March 31, 2020, of the information related to the Barr sales transaction. Income Statement (partial) $ $