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Customer allowances and returns Assume the following data for Casper Company before its year-end adjustments: Unadjusted...

Customer allowances and returns

Assume the following data for Casper Company before its year-end adjustments:

Unadjusted Balances
Debit Credit
Sales $1,750,000
Cost of Merchandise Sold $1,000,000
Estimated Returns Inventory 600
Customer Refunds Payable 400
Estimated cost of merchandise that will be returned in the next year $8,000
Estimated percent of refunds for current year sales 0.6%

a. Journalize the adjusting entry for the estimated customer allowances.

fill in the blank b3996af29f97f94_2
fill in the blank b3996af29f97f94_4

b. Journalize the adjusting entry for the estimated customer returns.

fill in the blank 876c350adfa500d_2
fill in the blank 876c350adfa500d_4
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Answer #1

ANSWER:

Transaction   Account Titles and Explanation   Debit   Credit
a.   Sales   $ 10,500  
Customer refund payable       $ 10,500
($1750000 X 0.6%)      
b.   Estimated returns inventory   $ 8,000  
Cost of merchandise sold       $ 8,000


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