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11 January, 07:10

Assume the following data for Lusk Inc. before its year-end adjustments: Debit CreditSales $3,600,000 Cost of Merchandise Sold $2,100,000Estimated Returns Inventory 1800Customer Refunds Payable 900Estimated cost of merchandise that Will be returned in the next year 15,000Estimated percent of refunds for current year sales 0.8%Journalize the adjusting entries for the following: a. Estimated customer allowances b. Estimated customer returns

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  1. 11 January, 07:39
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    a. Estimated customer allowances

    December 31, 202x. estimated customer allowance

    Dr Sales 27,900

    Cr Customer refunds payable 27,900

    total estimated refunds payable = $3,600,000 x 0.8% = $28,800 - $900 (account balance) = $27,900

    b. Estimated customer returns

    December 31, 202x. estimated customer returns

    Dr Estimated returns inventory 13,200

    Cr Cost of merchandise sold 13,200

    total estimated returns $15,000 - $1,800 = $13,200

    Explanation:

    Sales $3,600,000

    Cost of Merchandise Sold $2,100,000

    Estimated Returns Inventory $1800

    Customer Refunds Payable $900

    Estimated cost of merchandise that Will be returned in the next year $15,000

    Estimated percent of refunds for current year sales 0.8%
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