Raven Company started business in March 2019. Sales for the first year totaled P4,000,000. The entity priced its merchandise to yield a 40% gross profit based on sales. Industry statistics suggest that 10% of the merchandise sold to customers will be returned. The entity estimated sales returns based on the industry average. During the year, customers returned goods with sale price of P300,000. Required: Prepare journal entries to record sales, sales returns and the year-end adjusting entry for estimated sales returns.

Raven Company started business in March 2019. Sales for the first year totaled P4,000,000. The entity priced its merchandise to yield a 40% gross profit based on sales. Industry statistics suggest that 10% of the merchandise sold to customers will be returned. The entity estimated sales returns based on the industry average. During the year, customers returned goods with sale price of P300,000. Required: Prepare journal entries to record sales, sales returns and the year-end adjusting entry for estimated sales returns.

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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