Surplus Galore uses the gross method of accounting for sales discounts. Selected data from its records for the year ended December 31 was as follows: Journalize the adjusting entry for estimated sales discounts.

Gross Method

An accounting method for recording purchases at the full invoice price without deducting any cash discounts.

Sales Discounts

Reductions in sales price offered to customers, typically to prompt early payment or bulk purchases.

Adjusting Entry

A journal entry made at the end of an accounting period to record any unrecognized income or expenses for that period, ensuring the accounts are up to date.