In the current year, Borden Corporation had sales of $2,000,000 and cost of goods sold of $1,200,000. Borden expects returns in the following year to equal 8% of sales. The unadjusted balance in Inventory Returns Estimated is a debit of $6,000, and the unadjusted balance in Sales Refund Payable is a credit of $10,000. The adjusting entry or entries to record the expected sales returns is (are):
A.
| Sales Refund Payable | 150,0000 | |
| Accounts receivable | 150,000 |
B.
| Sales returns and allowances | 150,000 | |
| Sales | 150,000 | |
| Cost of Goods Sold | 90,000 | |
| Inventory Returns Estimated | 90,000 |
C.
| Sales Returns and Allowances | 150,000 | |
| Sales Refund Payable | 150,000 | |
| Inventory Returns Estimated | 90,000 | |
| Cost of goods sold | 90,000 |
D.
| Sales | 2,000,000 | |
| Sales Refund Payable | 160,000 | |
| Accounts receivable | 1,840,000 |
E.
| Accounts Receivable | 2,000,000 | |
| Sales | 2,000,000 |
Answer: C
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