False Value Hardware began 2013 with a credit balance of $32,000 - TopicsExpress

False Value Hardware began 2013 with a credit balance of $32,000 in the allowance for sales returns account. Sales and cash collections from customers during the year were $650,000 and $610,000, respectively. False Value estimates that 6% of all sales will be returned. During 2013, customers returned merchandise for credit of $28,000 to their accounts. What is the balance in the allowance for sales returns account at the end of 2013? Can someone please explain why the answer is 43,000 $ for allowance of sales return

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