During the year, a business made $3,650,000 cash sales. The business has a very liberal product return policy and therefore accepted product returns from customers and refunded $450,000 cash. What are the effects of these returns on the business’s financial condition?
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Condensed Balance Sheet |
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Cash |
Operating liabilities |
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Receivables |
Interest-bearing liabilities |
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Inventory |
Owners’ invested capital |
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PP&E, net |
Owners’ retained earnings |
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Assets |
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Liabilities and Owners’ Equity |