On March 10, 2020, Skysong Company sold to Barr Hardware 200 tool sets at a price of $ 51 each (cost $ 28 per set) with terms of n/60, f.o.b. shipping point. Skysong allows Barr to return any unused tool sets within 60 days of purchase. Skysong 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. Assume that instead of selling the tool sets on credit, that Skysong sold them for cash. Prepare journal entries for Skysong 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 Skysong prepares financial statements). Skysong 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 O for the amounts.) No. Account Titles and Explanation (1) Cash Sales Revenue (To record cash sales) Cost of Goods Sold Inventory Debit Credit 10,200 5,600 10,200 5,600 (To record cost of goods sold) (2) Sales Returns and Allowances (3) Accounts Payable (To record sales returns) Returned Inventory Cost of Goods Sold (To record cost of goods returned) Sales Returns and Allowances Accounts Payable (Adjusting entry for sales returns) Estimated Inventory Returns Cost of Goods Sold 306 168 204 112 306 168 204 112 (b) (Adjusting entry for cost of goods sold) Your answer is partially correct. Indicate the income statement and balance sheet reporting by Skysong at March 31, 2020, of the information related to the Barr sales. (List Assets in order of liquidity.) Sales Revenue Income Statement (partial) For the Quarter Ended March 31, 2020 Less Sales Returns and Allowances Net Sales 10200 510 9690 Cost of Goods Sold Gross profit Balance Sheet (partial) March 31, 2020 Accounts Receivable Allowance for Sales Returns and Allowances Returned Inventory $ 9894 (204) 280 5320 i 4370