Music Company started business in March 2018. Sales for its first year were $490,000. Beethoven ed its merchandise to yield a 45% gross profit based on sales dollars. Industry statistics suggest that 10% of the merchandise sold to customers will be returned. Beethoven estimated its sales returns based on the industry average. During the year, customers returned $34,500 in sales. Beethoven uses a perpetual inventory system. Required: 1. Prepare the journal entry to record the sale. 2. Prepare the journal entry to record sales returns. 3. Prepare the journal entry to record the year-end adjusting entry for estimated sales returns. Assume that cash has not yet been collected for merchandise that could yet be returned. No Transaction General Journal Debit Credit No Transaction General Journal Debit Credit General Joumal Debit Credit No Transaction
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