Under contract, Sojourn Co. delivers 1,300 units to Customer A for $25 each on 1 April....
Under contract, Sojourn Co. delivers 1,300 units to Customer A
for $25 each on 1 April. Sojourn’s documented policy is to allow a
customer to return any unused product within 90 days and receive a
full refund. The cost of each product is $18. On the basis of
historical experience, Sojourn estimates that 4% of the units will
be returned. Sojourn expects that the returned products can be
resold.
Required:
Record the journal entries to be made by Sojourn on 1 April to
recognize the sale.
|
General Journal |
|||
|
Date |
Account Titles and Explanation |
Debit |
Credit |
Homework Answers
As per the requirement, journal entries relating to sale is prepared below -
Journal Entries:
| Date | Accounts Titles and Explanations | Debit | Credit |
| April. 1. | Accounts Receivable - Customer A | $32,500 | |
| Sales Revenue (1,300 units * $25 per unit) | $32,500 | ||
| (To record the sales to customer A) | |||
| April. 1. | Cost of Goods Sold (1,300 units * $18 per unit) | $23,400 | |
| Merchandise Inventory | $23,400 | ||
| (To record the cost of goods sold) |
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