Lockern Co. records estimated future sales returns and allowances. Total sales amount to $1,550,000, and, in the past, sales returns and allowances have been 2 1/2% of sales.
Required:
Prepare journal entries to:
a. Record the estimated sales returns and allowances.
b. Record the return of $1,000 of defective furniture.

Question

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The Answer of Lockern Co. records estimated future sales returns and allowances. Total sales amount to $1,550,000, and, in the past, sales returns and allowances have been 2 1/2% of sales.
Required:
Prepare journal entries to:
a. Record the estimated sales returns and allowances.
b. Record the return of $1,000 of defective furniture.