5. Carter's Coats had sales of $500,000 in 2022. The Cost of goods sold for 2022 was $250,000. Carter estimates 10% of the sales will be returned. a. Required: Prepare the adjusting journal entries for sales returns payable. b. Extra Credit: Wren Wright returned a coat on January 7th. The coat was sold for $5,000, cash and had a cost of $2,500. Required: Prepare the journal entries for the return.

5. Carter's Coats had sales of $500,000 in 2022. The Cost of goods sold for 2022 was $250,000. Carter estimates 10% of the sales will be returned. a. Required: Prepare the adjusting journal entries for sales returns payable. b. Extra Credit: Wren Wright returned a coat on January 7th. The coat was sold for $5,000, cash and had a cost of $2,500. Required: Prepare the journal entries for the return.

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Question

5. Carter's Coats had sales of $500,000 in 2022. The Cost of goods sold for
2022 was $250,000. Carter estimates 10% of the sales will be returned.
a. Required: Prepare the adjusting journal entries for sales returns payable.
b. Extra Credit: Wren Wright returned a coat on January 7th. The coat was
sold for $5,000, cash and had a cost of $2,500.
Required: Prepare the journal entries for the return.

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