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Part 4 Sales returns Halifax Manufacturing allows its customers to return merchandise for any reason up to 9 0 days after delivery and receive a

Part 4 Sales returns
Halifax Manufacturing allows its customers to return merchandise for any reason up to 90 days after delivery and receive a credit to their accounts. All of Halifax's sales are for credit (no cash is collected at the time of sale). The company began 2024 with a refund liability of $340,000. During 2024, Halifax sold merchandise on account for $11,600,000. Halifax's merchandise costs are 75% of merchandise selling price. Also during the year, customers returned $575,000 in sales for credit, with $319,000 of
those being returns of merchandise sold prior to 2024, and the rest being merchandise sold during Sales returns, estimated to be 5% of sales, are recorded as an adjusting entry at the end of the year.
Required:
Prepare entries to
(a) record actual returns in 2024 of merchandise that was sold prior to 2024;
(b) record actual returns in 2024 of merchandise that was sold during 2024; and
(c) adjust the refund liability to its appropriate balance at year end.
What is the amount of the year-end refund liability after the adjusting entry is recorded?
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