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:

Machinery and Equipment

Assets used in the production process of goods or services, including machines, tools, and technology.

Land Improvements

Land improvements encompass enhancements made to land such as landscaping, paving, and lighting, which increase the value and usability of the property but may depreciate over time.

Buildings

Fixed assets used for business operations, representing a significant financial investment and appearing as long-term assets on a company's balance sheet.

Land

An asset representing the ground or property not intended for sale in the regular course of business, often used in operations or investment.