On March 10, 2025, Sandhill Company sold to Tamarisk Hardware 210 tool sets at a price of $52 each (cost $31 per set) with terms of n/60, f.o.b shipping point. Sandhill allows Tamarisk Hardware to return any unused tool sets within 60 days of purchase. Sandhill estimates that (1) 10 sets will be returned, (2) the cost of recovering the product will be immaterial, and (3) the returned tools sets can resold at a profit. On March 25, 2025, Tamarisk returned 7 tool sets and received a credit to its account. Assume that instead of selling the tool sets on credit, that Sanddhill sold them for cash.

Record the adjusting entries required for March 31, 2025:

(Adjusting entry for sales returns)

(Adjusting entry for Cost of goods sold)

Indicate the income statement reporting by Sandhill at March 31, 2025, of the information related to the Tamarisk Sales.

Sandhill Company Income Statement (partial)

For Quarter Ended March 31, 2025

Sales Revenue $10,920

Less: Sales returns and Allowances

Net Sales

Cost of Goods Sold $6,200

Gross Profit

Indicate the Balance sheet reporting by Sandhill at March 31, 2025, of the information related to the Tamarisk Sales.

Sandhill Company

Balance Sheet (partial)

March 31, 2025

Cash

Returned Inventory

Refund Liability?????