During the adjusting process on December 31, 2019, Gopher Company estimates that 3 percent of their Sales Revenue for 2019 will be returned by customers in 2020. If the company’s Sales Revenue for 2019 was $435,000, and the company’s gross profit percentage is 40 percent, determine the debit to the Estimated Returns Inventory on December 31, 2019.versus Virginia Company recorded sales revenue of $225,000 during 2018. In the process of preparing its adjusting entries for 2018, the company estimates that 4 percent of its sales revenue will be returned by customers. If the company’s gross profit averages to be 60% of sales revenue, one of the adjusting entries will credit cost of goods sold by:when solving both these problems is the formula the same or different since one is crediting(decreasing) an expense and one is debiting (increasing) inventory?

Case 1: Sales Revenue = $435,000 Return % = 3% GP = 40%

Answered: During the adjusting process on…

Financial Accounting

15th Edition

ISBN:9781337272124

Author:Carl Warren, James M. Reeve, Jonathan Duchac

Publisher:Carl Warren, James M. Reeve, Jonathan Duchac

Chapter6: Accounting For Merchandising Businesses

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Problem 9PB: On June 30, 2019, the balances of the accounts appearing in the ledger of Simkins Company are as...

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During the adjusting process on December 31, 2019, Gopher Company estimates that 3 percent of their Sales Revenue for 2019 will be returned by customers in 2020. If the company’s Sales Revenue for 2019 was $435,000, and the company’s gross profit percentage is 40 percent, determine the debit to the Estimated Returns Inventory on December 31, 2019.

versus

Virginia Company recorded sales revenue of $225,000 during 2018. In the process of preparing its adjusting entries for 2018, the company estimates that 4 percent of its sales revenue will be returned by customers. If the company’s gross profit averages to be 60% of sales revenue, one of the adjusting entries will credit cost of goods sold by:

when solving both these problems is the formula the same or different since one is crediting(decreasing) an expense and one is debiting (increasing) inventory?

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