Record expected sales return and cost of goods sold includes

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Reference no: EM131212074

Botanic Choice sells natural supplements to customers with an unconditional sales return if they are not satisfied. The sales returns extends 60 days. On February 10, 2018, a customer purchases $4,000 of products (cost $2,000). Assuming that based on prior experience, estimated returns are 20%. The journal entry to record the expected sales return and cost of goods sold includes

A. a debit to Allowance for Sales Returns of $800 and a credit to Cost of Goods sold of $400.

B. debit to Cash and a credit to Sales Revenue of $4,000

C. credit to Estimated Inventory Returns of $400

D.debt to Cost of Goods Sold and credit to Inventory for $2,000

Reference no: EM131212074

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