Question
Asked Dec 9, 2019
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Assume the following data for Lusk Inc. before its year-end adjustments:
Unadjusted Balances
Debit
Credit
$3,600,000
Sales
$2,100,000
Cost of Merchandise Sold
Estimated Returns Inventory
1,800
Customer Refunds Payable
900
Estimated cost of merchandise that
$15,000
will be returned in the next year
Estimated percent of refunds for
current year sales
0.8%
Journalize the adjusting entries for the following:
a. Estimated customer allowances
b. Estimated customer returns
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Assume the following data for Lusk Inc. before its year-end adjustments: Unadjusted Balances Debit Credit $3,600,000 Sales $2,100,000 Cost of Merchandise Sold Estimated Returns Inventory 1,800 Customer Refunds Payable 900 Estimated cost of merchandise that $15,000 will be returned in the next year Estimated percent of refunds for current year sales 0.8% Journalize the adjusting entries for the following: a. Estimated customer allowances b. Estimated customer returns

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Expert Answer

Step 1

a.

Calculate the amount of sales:

 

 

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Amount of sales = SalesxEstimated percent of refunds = S3, 600,000x 0.8% =S28,800

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Step 2

Record the journal entry for the es...

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Account titles and Explanation Debit Credit Date Sales $ 28,800 Customer refunds payable (To record the sale of inventory on account after discount) $ 28,800

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