Answer and Explanation:
The journal entry is shown below
1. Sales Returns & Allowance $1,040
To Accounts Receivable $1,040
(Being the estimated cost of returns is recorded)
Here the sales return and account receivable is recorded as it decreased the sales and decreased the assets
2. Inventory $333
To Cost of goods sold $333
(being the estimated cost of the goods returned is recorded)
Here the inventory and cost of goods sold is recorded as it increased the assets and decreased the expense
