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On December 31, the company estimates future sales refunds to be $900. As of that date, the company has an unadjusted debit balance in Accounts Receivable of $25,000 and an unadjusted credit balance of $300 in Sales Refunds Payable. Complete the related adjusting entry by selecting the account names and dollar amounts from the drop-down menus. (Pay attention to the date set forth below.)

Respuesta :

TomShelby

Answer:

sales refund expense 600 debit

      sales refund payable   600 credit

Explanation:

Sales refund currnet balance is 300 dollars

We expected sales refund for 900 dollars

Hence, we must make an adjustment for 600 dollars

To make this adjustment we use the Sales refund expense

Is important to notice we shold use this allowance as we cannot declare the decrease in the accounts receivables right away as that goes against the idea of matching cost when the time are generated.

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