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Statz Company had sales of $2,000,000 and related cost of goods sold of $1,050,000 for its first year of operations ending December 31, 20Y1

Accounting

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Statz Company had sales of $2,000,000 and related cost of goods sold of $1,050,000 for its first year of operations ending December 31, 20Y1. Statz provides customers a refund for any returned or damaged merchandise. At the end of 20Y1, Statz Company estimates that customers will request refunds for 1.8% of sales and estimates that merchandise costing $12,000 will be returned. Assume that on February 3, 20Y2, Buck Co. returned merchandise with an invoice amount of $4,900 for a cash refund. The returned merchandise originally cost Statz Company $3,000.

A. Journalize the adjusting entries on December 31, 20Y1, to record the expected customer returns.

*B.Journalize the entries to record the returned merchandise and cash refund to Buck Co. on February 3, 20Y2.**Refer to the Chart of Accounts for exact wording of account titles.