Elaine Company, a clothing store, sells clothing for a total selling price of $50,000 with a related cost of $35,000. Customers have a right of return within 30 days. Elaine Company estimates that 10% of the sales will be returned by customers.
The entry to recognize the cost of inventory sold will include a credit to "inventory" and a debit to cost of goods sold for:
Multiple Choice
$38,500.
$35,000.
$30,000.
$31,500.
