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

question 88

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.
On November 30,the company prepared the adjusting entries for sales returns.
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:

Scrotal Swelling

An abnormal enlargement of the scrotal sac, which may indicate various conditions, such as hydrocele, epididymitis, or inguinal hernia.

Testis

The male reproductive gland that produces sperm and testosterone, found in the scrotum.

Inguinal Ring

An anatomical structure in the groin area through which the spermatic cord (in men) and the round ligament of the uterus (in women) pass.

Direct Inguinal

Pertaining to a type of hernia that occurs when tissue protrudes directly through a weak spot in the abdominal muscles near the inguinal canal.