During 2018, its first year of operations, Hollis Industries recorded sales of $10,600,000 and experienced returnsof $720,000. Cost of goods sold totaled $6,360,000 (60% of sales). The company estimates that 8% of all saleswill be returned. Prepare the year-end adjusting journal entries to account for anticipated sales returns, assumingthat all sales are made on credit and all accounts receivable are outstanding.
During 2018, its first year of operations, Hollis Industries recorded sales of $10,600,000 and experienced returnsof $720,000. Cost of goods sold totaled $6,360,000 (60% of sales). The company estimates that 8% of all saleswill be returned. Prepare the year-end adjusting journal entries to account for anticipated sales returns, assumingthat all sales are made on credit and all accounts receivable are outstanding.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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During 2018, 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
that all sales are made on credit and all
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