McBeal & Company had sales of $9,000 for the month of December. Management expects 4% of these sales to be returns or allowances. The cost of goods associated with returns are $500. What would the adjusting entry on December 31 include?
A) Debit Estimated Inventory Returns $500
B) Credit Estimated Refund Liability $500
C) Debit Cost of Goods Sold $360
D) Credit Sales $360
A) Debit Estimated Inventory Returns $500
Explanation: sales × returns = $9,000 × 4% = $360
You might also like to view...
The conversion privilege allows investors to switch from one fund to another without fees if and only if the funds are managed by the same company such as Fidelity or Vanguard
Indicate whether the statement is true or false.
The strike price of a put option is the price
A) an investor must pay for the options contract. B) of the underlying stock at the time that the options contract is purchased. C) at which the underlying stock can be sold. D) at which the underlying stock can be bought.
What type of broker can protect your investments from systematic risk?
A) Online broker B) Discount broker C) Full service broker D) None of the above.
Loretta plans to start a small business, operated through a corporation. In year 0, she expects the corporation to generate a loss of $100,000. Subsequently, she expects the corporation to be profitable, and projects profit of $150,000 in year 1, and $250,000 in year 2. Using Appendix A and a 10% discount rate, calculate the present value of expected tax savings and costs on the business earnings for the first 3 years of operations if the business does not make an S corporation election.
A. $88,250 total tax cost B. $94,350 total tax cost C. $118,800 total tax cost D. $52,910 total tax cost