Halifax Manufacturing allows its customers to return merchandise for any reason up to 90 days after delivery and receive a c their accounts. All of Halifax's sales are for credit (no cash is collected at the time of sale). The company began 2021 with a re liability of $400,000. During 2021, Halifax sold merchandise on account for $12,500,000. Halifax's merchandise costs is 70% . merchandise selling price. Also during the year, customers returned $613,000 in sales for credit, with $338,000 of those being of merchandise sold prior to 2021, and the rest being merchandise sold during 2021. Sales returns, estimated to be 5% of sale recorded as an adjusting entry at the end of the year. Required: 1. Prepare entries to (a) record actual returns in 2021 of merchandise that was sold prior to 2021; (b) record actual returns in 20 merchandise that was sold during 2021; and (c) adjust the refund liability to its appropriate balance at year end. 2. What is the amount of the year-end refund liability after the adjusting entry is recorded? X Answer is not complete. Complete this question by entering your answers in the tabs below. Required 1 Required 2 Prepare entries to (a) record actual returns in 2021 of merchandise that was sold prior to 2021; (b) record actual returns in 2021 of merchandise that was sold during 2021; and (c) adjust the refund liability to its appropriate balance at year end. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.) No Year General Journal Debit Credit 1 2021 Refund liability 338,000 O Accounts receivable 338,000 2 2021 Inventory 01070 e
Halifax Manufacturing allows its customers to return merchandise for any reason up to 90 days after delivery and receive a c their accounts. All of Halifax's sales are for credit (no cash is collected at the time of sale). The company began 2021 with a re liability of $400,000. During 2021, Halifax sold merchandise on account for $12,500,000. Halifax's merchandise costs is 70% . merchandise selling price. Also during the year, customers returned $613,000 in sales for credit, with $338,000 of those being of merchandise sold prior to 2021, and the rest being merchandise sold during 2021. Sales returns, estimated to be 5% of sale recorded as an adjusting entry at the end of the year. Required: 1. Prepare entries to (a) record actual returns in 2021 of merchandise that was sold prior to 2021; (b) record actual returns in 20 merchandise that was sold during 2021; and (c) adjust the refund liability to its appropriate balance at year end. 2. What is the amount of the year-end refund liability after the adjusting entry is recorded? X Answer is not complete. Complete this question by entering your answers in the tabs below. Required 1 Required 2 Prepare entries to (a) record actual returns in 2021 of merchandise that was sold prior to 2021; (b) record actual returns in 2021 of merchandise that was sold during 2021; and (c) adjust the refund liability to its appropriate balance at year end. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.) No Year General Journal Debit Credit 1 2021 Refund liability 338,000 O Accounts receivable 338,000 2 2021 Inventory 01070 e
Financial Accounting Intro Concepts Meth/Uses
14th Edition
ISBN:9781285595047
Author:Weil
Publisher:Weil
Chapter8: Revenue Recognition, Receivables, And Advances From Customers
Section: Chapter Questions
Problem 38P
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![Exercise 7-8 (Algo) Sales returns (LO7-4]
Halifax Manufacturing allows its customers to return merchandise for any reason up to 90 days after delivery and receive a cre
their accounts. All of Halifax's sales are for credit (no cash is collected at the time of sale). The company began 2021 with a refu
liability of $400,000. During 2021, Halifax sold merchandise on account for $12,500,000. Halifax's merchandise costs is 70% of
merchandise selling price. Also during the year, customers returned $613,000 in sales for credit, with $338,000 of those being
of merchandise sold prior to 2021, and the rest being merchandise sold during 2021. Sales returns, estimated to be 5% of sales_
recorded as an adjusting entry at the end of the year.
Required:
1. Prepare entries to (a) record actual returns in 2021 of merchandise that was sold prior to 2021; (b) record actual returns in 2021
merchandise that was sold during 2021; and (c) adjust the refund liability to its appropriate balance at year end.
2. What is the amount of the year-end refund liability after the adjusting entry is recorded?
X Answer is not complete.
Complete this question by entering your answers in the tabs below.
Required 1
Required 2
Prepare entries to (a) record actual returns in 2021 of merchandise that was sold prior to 2021; (b) record actual returns in
2021 of merchandise that was sold during 2021; and (c) adjust the refund liability to its appropriate balance at year end. (If
no entry is required for a transaction/event, select "No journal entry required" in the first account field.)
No
Year
General Journal
Debit
Credit
1
2021
Refund liability
338,000
Accounts receivable
338,000
2
2021
Inventory
219,700 X
Inventory estimated returns
219,700 X
2021
Sales returns
275,000
Accounts receivable
275,000 O
4
2021
Inventory
178,750 X](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F3e1bfd6a-3cb6-4031-858f-4ba8da8545b1%2Fefe68866-5790-4f5d-8cf8-52c0fa581060%2Fqokidhp_processed.jpeg&w=3840&q=75)
Transcribed Image Text:Exercise 7-8 (Algo) Sales returns (LO7-4]
Halifax Manufacturing allows its customers to return merchandise for any reason up to 90 days after delivery and receive a cre
their accounts. All of Halifax's sales are for credit (no cash is collected at the time of sale). The company began 2021 with a refu
liability of $400,000. During 2021, Halifax sold merchandise on account for $12,500,000. Halifax's merchandise costs is 70% of
merchandise selling price. Also during the year, customers returned $613,000 in sales for credit, with $338,000 of those being
of merchandise sold prior to 2021, and the rest being merchandise sold during 2021. Sales returns, estimated to be 5% of sales_
recorded as an adjusting entry at the end of the year.
Required:
1. Prepare entries to (a) record actual returns in 2021 of merchandise that was sold prior to 2021; (b) record actual returns in 2021
merchandise that was sold during 2021; and (c) adjust the refund liability to its appropriate balance at year end.
2. What is the amount of the year-end refund liability after the adjusting entry is recorded?
X Answer is not complete.
Complete this question by entering your answers in the tabs below.
Required 1
Required 2
Prepare entries to (a) record actual returns in 2021 of merchandise that was sold prior to 2021; (b) record actual returns in
2021 of merchandise that was sold during 2021; and (c) adjust the refund liability to its appropriate balance at year end. (If
no entry is required for a transaction/event, select "No journal entry required" in the first account field.)
No
Year
General Journal
Debit
Credit
1
2021
Refund liability
338,000
Accounts receivable
338,000
2
2021
Inventory
219,700 X
Inventory estimated returns
219,700 X
2021
Sales returns
275,000
Accounts receivable
275,000 O
4
2021
Inventory
178,750 X
Transcribed Image Text:Required:
1. Prepare entries to (a) record actual returns in 2021 of merchandise that was sold prior to 2021; (b) record actual returns in 2021 of
merchandise that was sold during 2021; and (c) adjust the refund liability to its appropriate balance at year end.
2. What is the amount of the year-end refund liability after the adjusting entry is recorded?
X Answer is not complete.
Complete this question by entering your answers in the tabs below.
Required 1
Required 2
Prepare entries to (a) record actual returns in 2021 of merchandise that was sold prior to 2021; (b) record actual returns in
2021 of merchandise that was sold during 2021; and (c) adjust the refund liability to its appropriate balance at year end. (If
no entry is required for a transaction/event, select "No journal entry required" in the first account field.)
No
Year
General Journal
Debit
Credit
1
2021
Refund liability
338,000 O
Accounts receivable
338,000
2
2021
Inventory
219,700 X
Inventory-estimated returns
219,700
3
2021
Sales returns
275,000
Accounts receivable
275,000
2021
Inventory
178,750 X
4
Cost of goods sold
178,750
2021
Sales returns
-113,000 X
Refund liability
-113,000 x
6
2021
Inventory
73,450 8
Cost of goods sold
73,450 X
<Required 1
Required 2 >
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