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Lopez Company reports unadjusted first-year merchandise sales of $100000 and cost of merchandise sales of $30000 Compute gross profit using the unadjusted numbers above The company

Lopez Company reports unadjusted first-year merchandise sales of $100,000 and cost of merchandise sales of $30,000. a. Compute gross profit (using the unadjusted numbers above). b. The company expects future returns and allowances equal to 5% of sales and 5% of cost of sales. 1. Prepare the year-end adjusting entry to record the sales expected to be refunded. 2. Prepare the year-end adjusting entry to record the cost side of sales returns and allowances. 3. Recompute gross profit (using the adjusted numbers from parts 1 and 2). c. Is the Sales Refund Payable an asset, liability, or equity account? d. Is the Inventory Returns Estimated an asset, liability, or equity account?

Apr 24 2020 View more View Less

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