Question

Adjusting entries

Hahn Flooring Company uses

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 $1,336,700, while physical inventory indicates that $1,300,900 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	Cost of Goods Sold
	Inventory

b. Sales returns of $196,610 and merchandise returns of $77,130 are estimated for the current year's sales. If an amount box does not require an entry, leave it blank.

Dec. 31	Sales
	Customer Refunds Payable
	Estimated Returns Inventory
	Cost of Goods Sold

Answer 1

Answer = A)
Journal Entries
Date	ACCT Title and explanation	Debit	Credit
Dec, 31	Cost of Goods Sold ($1,336,700 - $ 1,300,900)	$35,800
	Inventory		$35,800
Answer = B)
Journal Entries
Date	ACCT Title and explanation	Debit	Credit
Dec, 31	Sales	$1,96,610
	Customer Refund Payable		$1,96,610
	Estimated returned inventory	$77,130
	Cost of Goods Sold		$77,130