On July 10, 2020, Sarasota Music sold CDs to retailers on account and recorded sales revenue of $752,000 (cost $609,120). Sarasota grants the right to return CDs that do not sell in 3 months following delivery. Past experience indicates that the normal return rate is 15%. By October 11, 2020, retailers returned CDs to Sarasota and were granted credit of $73,700.Prepare Sarasota’s journal entries to record (a) the sale on July 10, 2020, and (b) $73,700 of returns on October 11, 2020, and on October 31, 2020. Assume that Sarasota prepares financial statement on October 31, 2020. (Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No entry" for the account titles and enter 0 for the amounts.)No.DateAccount Titles and ExplanationDebitCredit(a) enter an account title to record sales on July 10, 2017enter a debit amountenter a credit amount enter an account title to record sales on July 10, 2017enter a debit amountenter a credit amount (To record sales) enter an account title to record cost of goods sold on July 10, 2017enter a debit amountenter a credit amount enter an account title to record cost of goods sold on July 10, 2017enter a debit amountenter a credit amount (To record cost of goods sold) (b) enter an account title to record sales returns on October 11, 2017enter a debit amountenter a credit amount enter an account title to record sales returns on October 11, 2017enter a debit amountenter a credit amount (To record sales returns) enter an account title to record cost of goods returned on October 11, 2017enter a debit amountenter a credit amount enter an account title to record cost of goods returned on October 11, 2017enter a debit amountenter a credit amount (To record cost of goods returned) enter an account title to record the transaction on October 31, 2017enter a debit amountenter a credit amount enter an account title to record the transaction on October 31, 2017enter a debit amountenter a credit amount

Journal entry Journal entry is a set of economic events which can be measured in financial terms.…

Answered: asota grants the right to return CDs…

Cornerstones of Financial Accounting

4th Edition

ISBN:9781337690881

Author:Jay Rich, Jeff Jones

Publisher:Jay Rich, Jeff Jones

Chapter8: Current And Contingent Liabilities

Section: Chapter Questions

Problem 7MCQ

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On July 10, 2020, Sarasota Music sold CDs to retailers on account and recorded sales revenue of $752,000 (cost $609,120). Sarasota grants the right to return CDs that do not sell in 3 months following delivery. Past experience indicates that the normal return rate is 15%. By October 11, 2020, retailers returned CDs to Sarasota and were granted credit of $73,700.

Prepare Sarasota’s journal entries to record (a) the sale on July 10, 2020, and (b) $73,700 of returns on October 11, 2020, and on October 31, 2020. Assume that Sarasota prepares financial statement on October 31, 2020. (Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No entry" for the account titles and enter 0 for the amounts.)

No.	Account Titles and Explanation	Debit	Credit
(a)	enter an account title to record sales on July 10, 2017	enter a debit amount	enter a credit amount
	enter an account title to record sales on July 10, 2017	enter a debit amount	enter a credit amount
	(To record sales)
	enter an account title to record cost of goods sold on July 10, 2017	enter a debit amount	enter a credit amount
	enter an account title to record cost of goods sold on July 10, 2017	enter a debit amount	enter a credit amount
	(To record cost of goods sold)
(b)	enter an account title to record sales returns on October 11, 2017	enter a debit amount	enter a credit amount
	enter an account title to record sales returns on October 11, 2017	enter a debit amount	enter a credit amount
	(To record sales returns)
	enter an account title to record cost of goods returned on October 11, 2017	enter a debit amount	enter a credit amount
	enter an account title to record cost of goods returned on October 11, 2017	enter a debit amount	enter a credit amount
	(To record cost of goods returned)
	enter an account title to record the transaction on October 31, 2017	enter a debit amount	enter a credit amount
	enter an account title to record the transaction on October 31, 2017	enter a debit amount	enter a credit amount

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