Netherland Corporation has the following unadjusted balances: Accounts Receivable, $80,000 (debit), and Allowance for Sales Discounts $300 (credit). Of the receivables, $50,000 of them are within the 2% discount period, and Netherland expects buyers to take $1,000 in future-period discounts ($50,000 × 2%) arising from this period's sales. The adjusting entry or entries to estimate sales discounts is (are):
A.
| Accounts Receivable | 80,000 | |
| Sales | 80,000 |
B.
| Sales Discounts | 1,000 | |
| Accounts receivable | 1,000 |
C.
| Sales Discounts | 50,000 | |
| Sales | 50,000 | |
| Cost of Goods Sold | 1,000 | |
| Inventory Returns Estimated | 1,000 |
D.
| Sales Discounts | 700 | |
| Allowance for Sales Discounts | 700 |
E.
| Sales Discounts | 1,000 | |
| Allowance for Sales Discounts | 1,000 |
Answer: D
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