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In: Accounting
During 2021, its first year of operations, Hollis Industries recorded sales of $10,600,000 and experienced returns...
During 2021, its first year of operations, Hollis Industries recorded sales of $10,600,000 and experienced returns of $720,000. Cost of goods sold totaled $6,360,000 (60% of sales). The company estimates that 8% of all sales will be returned. Prepare the year-end adjusting journal entries to account for anticipated sales returns under the assumption that all sales are made for cash (no accounts receivable are outstanding).
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Expert Solution
| Date | Accounts | Debit | Credit |
| December 31, 2021 | sales revenue (1060000*8%-720000) | 128000 | |
| Allowance for sales return | 128000 | ||
ekkarill92 answered 2 years agoRelated Solutions
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