halifax manufacturing allows its customers to return merchandise for any reason and receive a credit to their accounts. all of halifax’s sales are for credit (no cash is collected at the time of sale). the company began 2024 with a refund liability of $300,000. during 2024, halifax sold merchandise on account for $11,500,000. halifax's merchandise costs it 65% of merchandise selling price. also during the year, customers returned $450,000 in sales for credit, with $250,000 of those being returns of merchandise sold prior to 2024, and the rest being merchandise sold during 2024. sales returns, estimated to be 4% of sales, are recorded as an adjusting entry at the end of the year
