Smith and Son's Department Store Has a Policy That Allows

question 181

Essay

Smith and Son's Department Store has a policy that allows customers to return merchandise for up to 45 days for a full refund. Based on prior experience, approximately 8% of merchandise sold will be returned.
In November, the store's total sales were $2,500,000, all for cash. The cost of the merchandise sold was $1,600,000. No sales discount is offered for early payment.
In December, within the allowable return period, customers returned merchandise that retailed for $100,000 and that cost $66,000 for a refund.
Prepare the journal entries for these transactions. Omit explanations

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Definitions:

Foreigners

Individuals or entities from one country who are not natives or do not possess citizenship in the host country.

Infant-Industry Argument

The economic rationale that new or emerging industries should be protected from international competition until they become mature and competitive.

Political Pressure

The use of influence or persuasion by individuals or groups, often through lobbying or campaigning, to affect governmental policy or decisions.

Tariff

A tax imposed by a government on imports or exports of goods.