Question
In: Accounting
Sweater Co offers its customers the right to return any products purchased up to 30 days...
Sweater Co offers its customers the right to return any products purchased up to 30 days after the sale, for any reason. Last Tuesday, Sweater Co sold 100 red sweaters to different customers. Based on historical experience, Sweater Co expects 15 of those sweaters to be returned for a full refund. Each sweater sells for $80 and costs the company $35 to produce. What entries should be made?
Solutions
Expert Solution
| Account Titles | Debit | Credit |
| Accounts receivables | 8000 | |
| Sales revenue | 8000 | |
| [100*80] | ||
| Cost of goods sold | 3500 | |
| Inventory | 3500 | |
| [100*35] | ||
| Sales returns and allowances | 1200 | |
| Allowance for sales returns | 1200 | |
| [15*80] | ||
| Inventory adjustment for Estimated returns | 525 | |
| Cost of sales adjustment for estimated returns | 525 | |
| [15*35] |
ekkarill92 answered 1 year agoRelated Solutions
Halifax Manufacturing allows its customers to return merchandise for any reason up to 90 days after...
Halifax Manufacturing allows its customers to return merchandise
for any reason up to 90 days after delivery 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 2021 with a
refund liability of $320,000. During 2021, Halifax sold merchandise
on account for $11,700,000. Halifax's merchandise costs is 75% of
merchandise selling price. Also during the year, customers returned
$460,000 in sales for credit, with...
Halifax Manufacturing allows its customers to return merchandise for any reason up to 90 days after...
Halifax Manufacturing allows its customers to return merchandise
for any reason up to 90 days after delivery 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 2021 with a
refund liability of $360,000. During 2021, Halifax sold merchandise
on account for $12,100,000. Halifax's merchandise costs is 70% of
merchandise selling price. Also during the year, customers returned
$594,000 in sales for credit, with...
Halifax Manufacturing allows its customers to return merchandise for any reason up to 90 days after...
Halifax Manufacturing allows its customers to return merchandise for any reason up to 90 days after dellvery 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 2021 with a refund Hability of $340,000. During 2021, Halifax sold merchandise on account for $11,600,000. Halifax's merchandise costs it 75% of merchandise selling price. Also during the year, customers returned $575.000 in sales for credit with...
Halifax Manufacturing allows its customers to return merchandise for any reason up to 90 days after...
Halifax Manufacturing allows its customers to return merchandise for any reason up to 90 days after delivery 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 2018 with a refund liability of $300,000. During 2018, 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...
Halifax Manufacturing allows its customers to return merchandise for any reason up to 90 days after...
Halifax Manufacturing allows its customers to return merchandise for any reason up to 90 days after delivery 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 2021 with a refund liability of $460,000. During 2021, Halifax sold merchandise on account for $13,100,000. Halifax's merchandise costs is 60% of merchandise selling price. Also during the year, customers returned $650,000 in sales for credit, with...
Halifax Manufacturing allows its customers to return merchandise for any reason up to 90 days after...
Halifax Manufacturing allows its customers to return merchandise
for any reason up to 90 days after delivery 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 2018 with a
refund liability of $300,000. During 2018, 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...
Halifax Manufacturing allows its customers to return merchandise for any reason up to 90 days after...
Halifax Manufacturing allows its customers to return merchandise
for any reason up to 90 days after delivery 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 2021 with a
refund liability of $300,000. During 2021, Halifax sold merchandise
on account for $11,500,000. Halifax's merchandise costs is 65% of
merchandise selling price. Also during the year, customers returned
$450,000 in sales for credit, with...
Halifax Manufacturing allows its customers to return merchandise for any reason up to 90 days after...
Halifax Manufacturing allows its customers to return merchandise
for any reason up to 90 days after delivery 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 2018 with a
refund liability of $380,000. During 2018, Halifax sold merchandise
on account for $12,300,000. Halifax's merchandise costs it 70% of
merchandise selling price. Also during the year, customers returned
$603,000 in sales for credit, with...
Halifax Manufacturing allows its customers to return merchandise for any reason up to 90 days after...
Halifax Manufacturing allows its customers to return merchandise
for any reason up to 90 days after delivery 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 2021 with a
refund liability of $300,000. During 2021, Halifax sold merchandise
on account for $11,500,000. Halifax's merchandise costs is 65% of
merchandise selling price. Also during the year, customers returned
$450,000 in sales for credit, with...
Halifax Manufacturing allows its customers to return merchandise for any reason up to 90 days after...
Halifax Manufacturing allows its customers to return merchandise
for any reason up to 90 days after delivery 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 2018 with an
allowance for sales returns of $410,000. During 2018, Halifax sold
merchandise on account for $12,600,000. This merchandise cost
Halifax $8,190,000 (65% of selling prices). Also during the year,
customers returned $491,000 in sales for...
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