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Lacey Company recorded sales of $3,600,000 for the year ended December 31, 2020. During 2020, the company recorded actual returns and allowances of $45,000. As of December 31, 2020, Lacey estimates sales returns at 3% of current year sales. It is the company's policy to provide refunds on account Lacey uses a perpetual inventory system and records estimated returns at the end of the period. The balance in Refund Liability is $32,400 and the balance in Inventory--Estimated Returns is $12960 on January 1, 2020 a. Prepare the journal entries to record sales in 2020 assuming all sales are on account Cost of goods sold is 40% of the selling price. b. Prepare the journal entries to record actual returns in 2020, c Prepare the adjusting entries, if any, related to estimated returns on December 31, 2020, Note: If a line in a journal entry isn't required for the transaction, select "N/A" a. Cr. e Dr. 3,600,000 0 0 e 3,600,000 Account Name Accounts Receivable Sales Revenue To record sales Cost of Goods Sold Inventory To record cost of sales V 1.440,000 0 1,440,000 e 0 Cr. Dr. 45,000 O 0 07 b Account Name Sales Returns Accounts Receivable To record sales returns Inventory Cost of Goods Sold To record cost of sales retums 45,000 e . 18,000 0 0 18,000 Dr. Cr. 0 x 0 0 0 X T Account Name Sales Returns Refund Liability e To record estimated sales returns Inventory--Estimated Returns Cost of Goods Sold To record cost of estimated sales returns OX 0 0 0 x Show transcribed in age text

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