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College Accounting, Chapters 1-27

23rd Edition
HEINTZ + 1 other
ISBN: 9781337794756

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Chapter
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BuyFindarrow_forward

College Accounting, Chapters 1-27

23rd Edition
HEINTZ + 1 other
ISBN: 9781337794756
Textbook Problem

SALES RETURNS AND ALLOWANCES ADJUSTMENT At the end of year 1, MC’s estimates that $2,400 of the current year’s sales will be returned in year 2. Prepare the adjusting entry at the end of year 1 to record the estimated sales returns and allowances and customer refunds payable for this $2,400. Use accounts as illustrated in the chapter.

To determine

Journalize the adjusting entry at the end of Year 1 to record the sales returns and allowances and customer refunds payable.

Explanation

Journal entry: Journal entry is a set of economic events which can be measured in monetary terms. These are recorded chronologically and systematically.

Debit and credit rules:

  • Debit an increase in asset account, increase in expense account, decrease in liability account, and decrease in stockholders’ equity accounts.
  • Credit decrease in asset account, increase in revenue account, increase in liability account, and increase in stockholders’ equity accounts.

Journalize the adjusting entry at the end of Year 1 to record the sales returns and allowances and customer refunds payable.

DateAccount Titles and ExplanationPost Ref...

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