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Sheridan Choke sells natural supplements to customers with an unconditional sales return if they are not satisfied. The sales returns extends 60 days. On February
Sheridan Choke sells natural supplements to customers with an unconditional sales return if they are not satisfied. The sales returns extends 60 days. On February 10, 2021. a customer purchases $4500 of products cost $2250. Assuming that based on prior experience, estimated returns are 20%. The journal entry to record the expected sales return and cost of goods sold includes a debit to Cash and a credit to Sales Revenue of $4500. debit to Sales Returns and Allowance of $900 and a credit to Allowance for Sales Returns and Allowances of $450. debit to Cost of Goods Sold and credit to Inventory for $2250 credit to Estimated Inventory Returns of $450
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