at year end, acb company estimates that $6,000 of sales revenue and $1,900 of merchandise inventory from the past period will be returned in the future. what is the debit and credit to record the cost of the inventory that the company expects to be returned into inventory?

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diddag3131 diddag3131

04-11-2022
Business

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at year end, acb company estimates that $6,000 of sales revenue and $1,900 of merchandise inventory from the past period will be returned in the future. what is the debit and credit to record the cost of the inventory that the company expects to be returned into inventory?

Answer :

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abiolataiwo2015 abiolataiwo2015 · Answer 1 · 2022-11-08T07:14:12-05:00

The debit and credit to record the cost of the inventory that the company expects to be returned into inventory is Debit Estimated Returns Inventory $1,900, Credit Cost of Goods Sold $1,900.

How to prepare the journal entry?

Since we were told that the company has the amount of $1900 as the merchandise inventory which means that the appropriate journal entry to record the transaction will be:

Journal entry

Debit Estimated Returns Inventory $1,900

Credit Cost of Goods Sold $1,900

(To record cost of inventory)

Therefore the company will debit the amount of $1900 as returns inventory and credit $1900 as cost of goods sold.

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