in the current year, Borden Corporation had sales of $2,070,000 and cost of good
ID: 2407338 • Letter: I
Question
in the current year, Borden Corporation had sales of $2,070,000 and cost of goods sold of $1,235,000. Borden expects returns in the following year to equal 7% of sales. The unadjusted balance in Inventory Returns Estimated is a unadjusted balance In Sales Refund Payable is a credit of $17.000. The adjusting entry or entries to record the expected sales debit of $13,000, and the returns is (are): Multiple Choice Accounts Receivable 2,070,000 2,070,000 Sales returns and allovances 127.900 73,450 Prec 1af 25 la Next? commond optionExplanation / Answer
Q1. Answer is : Sales return and allowance Account Dr. 127900 Sales refund payable 127900 Inventory returns estimated Account Dr. 73450 Cost of Good sold 73450 Explanation: Sales refund payable on sales 144900 (2070000*7%) Less: Balance exist 17000 Sales refund payable created 127900 Estimated Inventory returns 86450 (1235000*7%) Less: Balance exist 13000 Inventory returns estaimted account created 73450 Q2. False. As the Quick ratio which represent the liquid assets to current liabilities is quite low Q3. Answer is Sales return and allowance Account Dr. 130200 (2170000*6%) Sales refund payable 130200 Inventory returns estimated Account Dr. 77100 (1285000*6%) Cost of Good sold 77100 Q4. Ttrue Acid test ratio: Acid test ratio = Quick assets/ Current liabilities 181000 /166000 = 1.09
Related Questions
Navigate
Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.