Record the actual sales return of merchandise sold prior to 2021. 2Record the cost of merchandise returned for goods sold prior to 2021. 3Record the actual sales return of merchandise sold during 2021. 4Record the cost of merchandise returned for goods sold during 2021. 5Record the year-end adjusting entry for estimated returns. 6Record the adjusting entry for the estimated return of merchandise to inventory.Need help with the recordings and the second question. Halifax Manufacturing allows its customers to return merchandise for any reason up to 90 days after delivery and receive a credit totheir accounts. All of Halifax's sales are for credit (no cash is collected at the time of sale). The company began 2021 with a refundliability of $410,000. During 2021, Halifax sold merchandise on account for $13,500,000. Halifax's merchandise costs is 65% ofmerchandise selling price. Also during the year, customers returned $532,000 in sales for credit, with $294,000 of those being returnsof merchandise sold prior to 2021, and the rest being merchandise sold during 2021. Sales returns, estimated to be 4% of sales, arerecorded as an adjusting entry at the end of the year.Required:1. Prepare entries to (a) record actual returns in 2021 of merchandise that was sold prior to 2021; (b) record actual returns in 2021 ofmerchandise that was sold during 2021; and (c) adjust the refund liability to its appropriate balance at year end.2. What is the amount of the year-end refund liability after the adjusting entry is recorded?

Name: Record the actual sales return of merchandise sold prior to 2021. 2Rec
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Description: Record the actual sales return of merchandise sold prior to 2021. 2Record the cost of merchandise returned for goods sold prior to 2021. 3Record the actual sales return of merchandise sold during 2021. 4Record the cost of merchandise returned for goo

Refund Liability account represents the amount of revenue that an organization does not expects to…

Answered: Halifax Manufacturing allows its…

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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Record the actual sales return of merchandise sold prior to 2021.
2

Record the cost of merchandise returned for goods sold prior to 2021.
3

Record the actual sales return of merchandise sold during 2021.
4

Record the cost of merchandise returned for goods sold during 2021.
5

Record the year-end adjusting entry for estimated returns.
6

Record the adjusting entry for the estimated return of merchandise to inventory.
Need help with the recordings and the second question.

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 $410,000. During 2021, Halifax sold merchandise on account for $13,500,000. Halifax's merchandise costs is 65% of
merchandise selling price. Also during the year, customers returned $532,000 in sales for credit, with $294,000 of those being returns
of merchandise sold prior to 2021, and the rest being merchandise sold during 2021. Sales returns, estimated to be 4% of sales, are
recorded as an adjusting entry at the end of the year.
Required:
1. Prepare entries to (a) record actual returns in 2021 of merchandise that was sold prior to 2021; (b) record actual returns in 2021 of
merchandise that was sold during 2021; and (c) adjust the refund liability to its appropriate balance at year end.
2. What is the amount of the year-end refund liability after the adjusting entry is recorded?

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