ABC Electronics had sales to customers of $600,000 during2020. The company has consistently experienced a 30%gross profit percentage and estimates that 4% of all saleswill be returned. During 2020, customers returnedmerchandise for credit of $20,000 to their accounts. Thebalance in the allowance for sales returns account at thebeginning of 2020 was $28,000.What is the balance in the allowance for sales returnsaccount at the end of 2020?

Step 1: Definition of Key TermsAllowance for Sales Returns: A contra-revenue account used to…

Answered: ABC Electronics had sales to customers…

Principles of Accounting Volume 1

19th Edition

ISBN:9781947172685

Author:OpenStax

Publisher:OpenStax

Chapter9: Accounting For Receivables

Section: Chapter Questions

Problem 10EB: Starlight Enterprises has net credit sales for 2019 in the amount of $2,600,325, beginning accounts...

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Millennial Manufacturing has net credit sales for 2018 in the amount of $1,433,630, beginning accounts receivable balance of $585,900, and an ending accounts receivable balance of $621,450. Compute the accounts receivable turnover ratio and the number of days sales in receivables ratio for 2018 (round answers to two decimal places). What do the outcomes tell a potential investor about Millennial Manufacturing if industry average is 2.6 times and number of days sales ratio is 180 days?
Berry Farms has an accounts receivable balance at the end of 2018 of $425,650. The net credit sales for the year are $924,123. The balance at the end of 2017 was $378,550. What is the number of days sales in receivables ratio for 2018 (round all answers to two decimal places)?
Fitbands estimated sales are: What are the balances in accounts receivable for January, February, and March if 65% of sales is collected in the month of sale, 25% is collected the month after the sale, and 10% is second month after the sale?
Clovis Enterprises reports $845,500 in credit sales for 2018 and $933,000 in 2019. It has a $758,000 accounts receivable balance at the end of 2018 and $841,000 at the end of 2019. Clovis uses the income statement method to record bad debt estimation at 4% during 2018. To manage earnings more favorably, Clovis changes bad debt estimation to the balance sheet method at 5% during 2019. A. Determine the bad debt estimation for 2018. B. Determine the bad debt estimation for 2019. C. Describe a benefit to Clovis Enterprises in 2019 as a result of its earnings management.
Aerospace Electronics reports $567,000 in credit sales for 2018 and $632,500 in 2019. They have a $499,000 accounts receivable balance at the end of 2018, and $600,000 at the end of 2019. Aerospace uses the income statement method to record bad debt estimation at 5% during 2018. To manage earnings more favorably, Aerospace changes bad debt estimation to the balance sheet method at 7% during 2019. A. Determine the bad debt estimation for 2018. B. Determine the bad debt estimation for 2019. C. Describe a benefit to Aerospace Electronics in 2019 as a result of its earnings management.
Using the following select financial statement information from Mover Supply Depot, compute the number of days sales in receivables ratios for 2018 and 2019 (round answers to two decimal places). What do the outcomes tell a potential investor about Mover Supply Depot if the competition collects in approximately 65 days?
FlareTech Inc. had sales to customers of $520,000 during 2018. The company has consistently experienced a 30% gross profit percentage and estimates that 6% of all sales will be returned. During 2018, customers returned merchandise for credit of $21,000 to their accounts. The balance in the allowance for sales returns account at the beginning of 2018 was $26,000. What is the balance in the allowance for sales returns account at the end of 2018?
Accurate Value Hardware began in 2019 with a credit balance of $47,000 in the allowance for sales returns account. Sales and cash collections from customers during the year were $663,000 and $615,000, respectively. Accurate Value estimates that 7.2% of all sales will be returned. In 2019, customers returned merchandise for a credit of $36,000 to their accounts. Accurate Value's 2019 income statement would report net sales of__.
The allowance for sales return account at the end
What percentage of sales is expected to be returned on these general accounting question?
X Co. had $2 million in credit sales during 2021. Historically, 2% of its sales are returned by customers. During 2021, customers returned $25,000 worth of merchandise. The adjusting journal entry for 2021 will include: Debit to Refund Liability of $12,500. Debit to Sales Returns for $40,000 Debit to Sales Returns of $15,000. Credit to Sales Returns for $20,000
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, assuming that all sales are made on credit and all accounts receivable are outstanding. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.)

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