In Its First Year of Business, Borden Corporation Had Sales

Multiple Choice

In its first year of business, Borden Corporation had sales of $2,000,000 and cost of goods sold of $1,200,000. Borden expects returns in the following year to equal 8% of sales. The adjusting entry or entries to record the expected sales returns is (are) :

A) $$\begin{array} { | l | r | l | } \hline \text { Sales returns and allowances } & 160,000 & \\\hline \text { Sales } & & 160,000 \\\hline \text { Cost of Goods Sold } & 96,000 & \\\hline \text { Inventory Returns Estimated } & & 96,000 \\\hline\end{array}$$
B) $$\begin{array} { | l | l | l | } \hline \text { Sales Refind Payable } & 160,000 & \\\hline \text { Accounts receivable } & & 160,000 \\\hline\end{array}$$
C) $$\begin{array} { | l | r | r | } \hline \text { Sales } & 2,000,000 & \\\hline \text { Sales Refind Payable } & & 160,000 \\\hline \text { Accounts receivable } & & 1,840,000 \\\hline\end{array}$$
D) $$\begin{array} { | l | r | l | } \hline \text { Sales Returns and Allowances } & 160,000 & \\\hline \text { Sales Refund Payable } & & 160,000 \\\hline \text { Inventory Returns Estimated } & 96,000 & \\\hline \text { Cost of goods sold } & & 96,000 \\\hline\end{array}$$
E) $$\begin{array} { | l | l | l | } \hline \text { Accounts Recivable } & 2,000,000 & \\\hline \text { Sales } & & 2,000,000 \\\hline\end{array}$$