In the current year, Borden Corporation had sales of $2,030,000 and cost of goods sold of $1,215,000. Borden expects returns in the following year to equal 8% of sales. The unadjusted balance in Inventory Returns Estimated is a debit of $9000, and the unadjusted balance in Sales Refund Payable is a credit of $13,000. The adjusting entry or entries to record the expected sales returns is (are):
A.
| Accounts Receivable | 2,030,000? | |
| Sales | 2,030,000? |
B.
| Sales Refund Payable | 149,400? | |
| Accounts receivable | 149,400? |
C.
| Sales | 2,030,000? | |
| Sales Refund Payable | 162,400? | |
| Accounts receivable | 1,867,600? |
D.
| Sales returns and allowances | 149,400? | |
| Sales | 149,400? | |
| Cost of Goods Sold | 88,200? | |
| Inventory Returns Estimated | 88,200? |
E.
| Sales Returns and Allowances | 149,400? | |
| Sales Refund Payable | 149,400? | |
| Inventory Returns Estimated | 88,200? | |
| Cost of goods sold | 88,200? |
Answer: E
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