Journal Entries - Right of Return | |||
Date | Particulars | Debit | Credit |
A) | |||
3-Jan-20 | Accounts Receivable | 1500000 | |
Sales | 1200000 | ||
Refund Liability | 300000 | ||
(To record the sale of seed on account to customers and to record the possible return) | |||
3-Jan-20 | Cost of Goods Sold | 640000 | |
Refund Asset | 160000 | ||
Inventory | 800000 | ||
(To record the cost of goods sold and making a provision for right to return) | |||
B) | |||
1-Feb-20 | Refund Liability | 100000 | |
Accounts Receivable | 100000 | ||
( To record the return of seeds) | |||
Inventory | 53333 | ||
Refund Asset | 53333 | ||
(To record the cost of goods returned (800000*100000)/1500000) |
C. If Tianjin Growth is unable to reliably estimate returns, then it should avoid recording the revenue till the loss can be ascertained or till the return period expires.
Tianjin Growth Company is presently testing a number of new ag recently harvested. To stimulate interest...
Metlock Company is presently testing a number of new agricultural seeds that it has recently harvested. To stimulate interest, it has decided to grant to five of its largest customers the unconditional right of return to these products if not fully satisfied. The right of return extends for 4 months. Metlock estimates returns of 15%. Metlock sells these seeds on account for $1,390,000 (cost $764,500) on January 2, 2017. Customers are required to pay the full amount due by March...
d E18-20 (LO3) (Sales with Returns) Organic Growth Company is presently testing a number of new agricultural seeds that it has recently harvested. To stimulate interest, it has decided to grant to five of its largest customers the unconditional right of return to these products if not fully satisfied. The right of return extends for 4 months. Organic Growth estimates returns of 20%. Organic Growth sells these seeds on account for $1,500,000 (cost $750,000) on January 2, 2017. Customers are...
Sage Company is presently testing a number of new agricultural seeds that it has recently harvested. To stimulate interest, it has decided to grant to five of its largest customers the unconditional right of return to these products if not fully satisfied. The right of return extends for 4 months. Sage estimates returns of 20%. Sage sells these seeds on account for $1,500,000 (cost $825,000) on January 2, 2017. Customers are required to pay the full amount due by March...
Question 2 Skysong Company is presently testing a number of new agricultural seed planters that it has recently developed. To stimulate interest, it has decided to grant to five of its largest customers the unconditional right of return to these products if not fully satisfied. The right of retum extends for 4 months. Skysong estimates returns of 15%. Skysong sells these planters on account for $1,390,000 (cost $764,500) on January 2, 2020. Customers are required to pay the full amount...
Question 9 Crane Growth Company presenty tesdngaum w agincultreseds that it has re Cth celle theemulate interea 100 000) 17 onditional right months. Cra Customers are required pay the full amount due by June 15, 20117. The company follows IFRS. Prepare the journal entry for Crane Growth at April 2, 2017, assuming Crane Growth estimates returns of 20% based on prior experience. (Credit account titles are automatically indented when the entered. Do not indent manually. If no entry required, select...
Botanic Choice sells natural supplements to customers with an unconditional sales return if they are not satisfied. The sales returns period extends 60 days. On February 1, 2018, a customer purchases $4,000 of products (cost $2,400) by paying cash. The journal entry to record the actual return of $800 of merchandise on February 3, 2018 includes a a. debit to Cost of Goods Sold for $480. b. debit to Estimated Inventory Returns for $480. c. debit to Returned Inventory for...
Crane-Air is selling a new model of high-efficiency air conditioner. To stimulate interest, Crane-Air is granting certain large customers the unconditional right to return these air conditioners if not fully satisfied. The right of return extends for six months. Crane-Air estimates returns of 9%. Crane-Air sells these air conditioners on account for $18,520,000 (cost $12,038,000) on April 2, 2017. Customers are required to pay the full amount due by June 15, 2017. Prepare the journal entry for Crane-Air on April...
1. Sales Discounts (6 points) Your company provides sales discounts to customers that pay sooner, and they typically do. You make a sale of $1,000 on 9/1/2020 to your favorite customer and provide terms 2/10, n/30. a) Provide the journal entry to record this sale on 9/1/2020 under the net method. b) Assume the customer pays in full in 8 days. Provide the journal entry to record the cash receipt. c) Instead, assume the customer pays in full in 29...
Accounting ii) QUESTION 3 The Income Statement of Adom Enterprise for the year ended 31" March, 2020 as prepared by an Accounts Assistant indicated a net profit of GHS 148,080. Though the cash book on 31 March, 2020 showed a balance at bank to be GHS 13.460. Your attention is however drawn to the following: i) Cheques from customers totalling GHS 14,940 which were recorded in the cash book on March 25, 2020 were not credited by the bank until...
QUESTION 3 The Income Statement of Adom Enterprise for the year ended 31" March, 2020 as prepared by an Accounts Assistant indicated a net profit of GHS 148,080. Though, the cash book on 31" March, 2020 showed a balance at bank to be GHS 13,460. Your attention is however drawn to the following: Cheques from customers totalling GHS 14,940 which were recorded in the cash book on March 25, 2020 were not credited by the bank until April 2, 2020....