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 2024 with a refund liability of $400,000. During 2024, Halifax sold merchandise on account for $13,400,000. Halifax's merchandise costs are 65% of merchandise selling price. Also during the year, customers returned $661,000 in sales for credit, with $365,000 of those being returns of merchandise sold prior to 2024, and the rest being merchandise sold during 2024. Sales returns, estimated to be 5% of sales, are recorded as an adjusting entry at the end of the year.Required:Prepare entries to (a) record actual returns in 2024 of merchandise that was sold prior to 2024; (b) record actual returns in 2024 of merchandise that was sold during 2024; and (c) adjust the refund liability to its appropriate balance at year end.What is the amount of the year-end refund liability after the adjusting entry is recorded? Complete this question by entering your answers in the tabs below.Required 1 Required 2What is the amount of the year-end refund liability after the adjusting entry is recorded?Ending balance in refund liability< Required 1Required 2 > Complete this question by entering your answers in the tabs below.Required 1 Required 2Prepare entries to (a) record actual returns in 2024 of merchandise that was sold prior to 2024; (b) record actual returns in 2024 ofmerchandise that was sold during 2024; and (c) adjust the refund liability to its appropriate balance at year end.Note: If no entry is required for a transaction/event, select "No journal entry required" in the first account field.View transaction list View journal entry worksheetNo12Year20242024Refund liabilityAccounts receivableGeneral JournalInventoryMiscellaneous expense< Required 1Required 2>Debit365,000Credit365,000Ⓒ

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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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Required:

Prepare entries to (a) record actual returns in 2024 of merchandise that was sold prior to 2024; (b) record actual returns in 2024 of merchandise that was sold during 2024; and (c) adjust the refund liability to its appropriate balance at year end.
What is the amount of the year-end refund liability after the adjusting entry is recorded?

Complete this question by entering your answers in the tabs below.
Required 1 Required 2
Prepare entries to (a) record actual returns in 2024 of merchandise that was sold prior to 2024; (b) record actual returns in 2024 of
merchandise that was sold during 2024; and (c) adjust the refund liability to its appropriate balance at year end.
Note: If no entry is required for a transaction/event, select "No journal entry required" in the first account field.
View transaction list View journal entry worksheet
No
1
2
Year
2024
2024
Refund liability
Accounts receivable
General Journal
Inventory
Miscellaneous expense
< Required 1
Required 2
>
Debit
365,000
Credit
365,000
Ⓒ

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