Adjusting entries Hahn Flooring Company uses a perpetual inventory system. Journalize the December 31 adjusting...
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Adjusting entries Hahn Flooring Company uses a perpetual inventory system. Journalize the December 31 adjusting entries based upon the following: a. The inventory account has a balance of $1,333,150, while physical inventory indicates that $1,309,900 of merchandise is on hand. Assume any shrinkage is a normal amount. If an amount box does not require an entry, leave it blank. Dec. 31 Feecback romurwor a. Inventory shrinkage is recorded by decreasing merchandise inventory and increasing cost of merchandise sold for the difference between the perpetual inventory records and the inventory on hand. b. Sales refunds and allowances of $125,000 and merchandise returns of $80,000 are estimated for the current year's sales, If an amount box does not require an entry, leave it blank. Feedback b. At the end of an accounting period, sellers are required to estimate returns and allowances. Two entries are required. The first reduces Sales account and increases a Customer Refunds Payable account for the estimated returns and allowances to be given to customers in the future. The second creates an Estimated Returns Inventory account and reduces the Cost of Goods Sold account for the cost of the merchandise expected to be returned
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