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College Accounting, Chapters 1-27

23rd Edition
HEINTZ + 1 other
ISBN: 9781337794756

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BuyFindarrow_forward

College Accounting, Chapters 1-27

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

ADJUSTMENTS FOR A MERCHANDISING BUSINESS: PERPETUAL INVENTORY SYSTEM WITH SALES RETURNS AND ALLOWANCES A partial Trial Balance for Coleman Company as of December 31, 20-- is provided below.

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Coleman has made the following estimates for next year:

  1. 1. Sales made this year of $8,800 will be returned next year and customers will be granted full refunds.
  2. 2. The estimated cost of the inventory sold this year and expected to be returned by customers next year is $6,400.

Open T accounts and enter the balances for the above accounts. Make appropriate adjustments to the T accounts.

To determine

Prepare T-accounts and make appropriate adjustments to the T-account.

Explanation

Perpetual inventory system: The method or system of maintaining, recording, and adjusting the inventory perpetually throughout the year, is referred to as perpetual inventory system.

T-account:

T-account is the form of the ledger account, where the journal entries are posted to this account...

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