Assume the following data for Oshkosh Company before its year-end adjustments:
Unadjusted Balances
Debit Credit
Sales $51,600000
Cost of Merchandise Sold $31,750,000
Estimated Returns Inventory 28,100
Customer Refunds Payable115,400
Estimated cost of merchandise that
will be returned in the next year $400,000
Estimated percent of refunds for
current year sales 1.2%
Journalize the adjusting entries for the following:
a. Estimated customer refunds and allowances
b. Estimated customer returns
Answer:
a. Sales ($51,600,000 × 1.2%) 619,200
Customer Refunds Payable 619,200
b. Estimated Returns Inventory 400,000
Cost of Merchandise Sold 400,000