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ProBuilder reports merchandise sales of $68,000 and cost of merchandise sales of $13,600 in its first year of operations ending June 30. It makes fiscal-year-end
ProBuilder reports merchandise sales of $68,000 and cost of merchandise sales of $13,600 in its first year of operations ending June 30. It makes fiscal-year-end adjusting entries for estimated future returns and allowances equal to 5% of sales, or $3,400, and 5% of cost of sales, or $680.
a. & b. Prepare the June 30 fiscal-year-end adjusting journal entry for future returns and allowances related to sales and cost of sales.
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