PREPARE ADJUSTING ENTRIES... 7.) You note during the review of sales, that a reb
ID: 2508138 • Letter: P
Question
PREPARE ADJUSTING ENTRIES...
7.) You note during the review of sales, that a rebate was issued for the 2018 Income Tax Game to encourage sales. 39,000 games were sold. Customers can mail in their receipt and receive a $1 rebate per game. It is estimated that 60% of customers will send in the rebate. The rebate expires on January 31, 2019. To date, 8,000 customers have sent in the rebate and $16,000 has been refunded. Without any direction, the accounting clerk debited Miscellaneous Selling Expense and credited Cash for the $16,000. The management of Accounting Creations would prefer to have this type of expense in a separate account (Rebate Expense) so they can properly analyze for future ideas.
8.) Accounting Creations has a straight tax rate of 35%. Income tax expense is Net Income before taxes times 35%. (Hint: Prepare the Income Statement up to Net Income before Taxes and then record this adjusting journal entry.)
Explanation / Answer
Answer
7.
The correct adjusting journal entry:.
It has to the rectification entry.
8.
Question is incomplete.
Date Particulars Dr Cr Sales rebate $16000 Selling expenses $16000Related Questions
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