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Exercise 7-9 (Static) Sales returns [LO7-4] Halifax Manufacturing allows its customers to return merchandise for any reason and receive a credit to their accounts. All of Halifax's sales are for credit (no cash is collected at the time of sale). The company began 2024 with a refund liability of $300,000. During 2024, Halifax sold merchandise on account for $11,500,000. Halifax's merchandise costs it 65% of merchandise selling price. Also during the year, customers returned $450,000 in sales for credit, with $250,000 of those being returns of merchandise sold prior to 2024 , and the rest being merchandise sold during 2024 . Sales returns, estimated to be 4% of sales, are recorded as an adjusting entry at the end of the year. Required: 1. Prepare entries to (a) record actual returns in 2024 of merchandise that was sold prior to 2024; (b) record actual returns in 2024 of merchandise that was sold during 2024 ; 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? × Answer is complete but not entirely correct. Complete this question by entering your answers in the tabs below. Prepare entries to (a) record actual returns in 2024 of merchandise that was sold prior to 2024; (b) record actual returns 2024 of merchandise that was sold during 2024 ; and (c) adjust the refund liability to its appropriate balance at year end. Note: If no entry is required for a transaction/event, select "No journal entry required" in the first account field. Journal entry worksheet Record the year-end adjusting entry for estimated returns. Note: Enter debits before credits. Journal entry worksheet Record the adjusting entry for the estimated return of merchandise to inventory. Note: Enter debits before credits. Complete this question by entering your answers in the tabs below. What is the amount of the year-end refund liability after the adjusting entry is recorded?
Exercise 7-9 (Static) Sales returns [LO7-4] Halifax Manufacturing allows its customers to return merchandise for any reason and receive a credit to their accounts. All of Halifax's sales are for credit (no cash is collected at the time of sale). The company began 2024 with a refund liability of $300,000. During 2024, Halifax sold merchandise on account for $11,500,000. Halifax's merchandise costs it 65% of merchandise selling price. Also during the year, customers returned $450,000 in sales for credit, with $250,000 of those being returns of merchandise sold prior to 2024 , and the rest being merchandise sold during 2024 . Sales returns, estimated to be 4% of sales, are recorded as an adjusting entry at the end of the year. Required: 1. Prepare entries to (a) record actual returns in 2024 of merchandise that was sold prior to 2024; (b) record actual returns in 2024 of merchandise that was sold during 2024 ; 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? × Answer is complete but not entirely correct. Complete this question by entering your answers in the tabs below. Prepare entries to (a) record actual returns in 2024 of merchandise that was sold prior to 2024; (b) record actual returns 2024 of merchandise that was sold during 2024 ; and (c) adjust the refund liability to its appropriate balance at year end. Note: If no entry is required for a transaction/event, select "No journal entry required" in the first account field. Journal entry worksheet Record the year-end adjusting entry for estimated returns. Note: Enter debits before credits. Journal entry worksheet Record the adjusting entry for the estimated return of merchandise to inventory. Note: Enter debits before credits. Complete this question by entering your answers in the tabs below. What is the amount of the year-end refund liability after the adjusting entry is recorded?
Journal entries for the given case are as follows: (a)Recordactual returns in 2024 of merchandisethat was sold before 2024:Account Titles/Explanation Debit Credit.Accounts receivable250,000Refund liability250,000(To record actual return in 2024 of merchandise sold before 2024) b) Record actual returns 2024 of merchandise that was sold during 2024:Account Titles/Explanation Debit Credit Accounts receivable200,000Refund liability200,000(To record actual return in 2024 of merchandise sold during 2024)c) Adjust the refundliabilityto its appropriate balance at year-end Account Titles/Explanation Debit Credit Refund liability25,000Estimated refund liability25,000(To adjust the refund liability to its appropriate balance at year-end)What is the amount of the year-end refund liability after the adjusting entry is recorded.Amount of year-end refund liability is $275,000 after theadjustingentry is recorded. The year-end estimated refund liability is $25,000, and the refund liability balance at the start of the year is $300,000. Thus, the year-end refund liability balance would be calculated as:$300,000 - $25,000 = $275,000.To know more aboutRecordvisit:brainly.com/question/33695069#SPJ11...