Clausen Corporation Has Estimated for October, Based on Current Sales

question 244

Essay

Clausen Corporation has estimated for October, based on current sales of $1,750,000 and cost of goods sold of $950,000, that current and future returns and allowances will equal 4% of those sales. Prepare the adjusting entries necessary to record the revenue side and cost side estimates for returns and allowances.

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Definitions:

Ordinal Data

Data that can be categorized and ranked in a specific order, but the intervals between the ranks are not necessarily equal.

Interval Data

A type of numerical data in which the intervals between numbers on the scale are interpretable and equal, allowing for meaningful comparison and arithmetic operations.

Nominal Data

Data classified into categories that cannot be ordered in a meaningful way.

Interval Data

A type of data that is measured along a scale, where the difference between values is meaningful, but there is no true zero point.