During 2024 , its first year of operations, Ashbaugh Industries recorded sales of
$22,300,000
and experienced returns of
$1,530,000
. Returns are accounted for as they occur, with additional estimated returns accrued at the end of the period. Cost of goods sold totaled
$13,380,000
(
60%
of sales). The company estimates that
8%
of all sales will be returned. The year-end adjusting journal entry to account for anticipated sales returns would include a: Multiple Choice Credit to sales returns of
$254,000
. Credit to refund liability of
$254,000
. Debit to sales returns of
$1,784,000
. Debit to cost of sales of
$1,784,000