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At the beginning of the current soccer season, on May 1, 2021, Fullback Sports has 92 soccer balls in inventory at $10 each. The company uses a perpetual inventory system and the contract-based approach for revenue recognition. Based on past experience. Fullback's management estimates returns at 20% of sales and has a stated return policy of 15 days from the date of sale. The following sales transactions occurred in May:

At the beginning of the current soccer season, on May 1, 2021, Fullback Sports has 92 soccer balls in inventory at $10 each. The company uses a perpetual inventory system and the contract-based approach for revenue recognition. Based on past experience. Fullback's management estimates returns at 20% of sales and has a stated return policy of 15 days from the date of sale. The following sales transactions occurred in May:

Intermediate Accounting: Reporting And Analysis
Intermediate Accounting: Reporting And Analysis
3rd Edition
ISBN:9781337788281
Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach
Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach
Chapter7: Inventories: Cost Measurement And Flow Assumptions
Section: Chapter Questions
Problem 8P: Comprehensive The following information for 2019 is available for Marino Company: 1. The beginning...
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At the beginning of the current soccer season, on May 1, 2021, Fullback Sports has 92 soccer balls in inventory at $10 each. The company uses a perpetual inventory system and the contract-based approach for revenue recognition. Based on past experience. Fullback's management estimates returns at 20% of sales and has a stated return policy of 15 days from the date of sale. The following sales transactions occurred in May: May 5 Sold 15 soccer balls to Wolverine Soccer Club for $20 each, n/30. 7. Wolverine Soccer Club returned 3 of the balls after determining it had purchased more balls than it needed. Fullback gave Wolverine a credit on its account and returned the balls to inventory. 10 Sold 40 balls at $20 each to cash customers. 12 8 of the balls purchased for cash on May 10 were returned for cash because they were damaged. The balls were scrapped. Sold 19 balls to Spectre Community Club for $20 each, n/30. 17 31 Collected cash from Wolverine Soccer Club for the amount owing. Date Account Titles and Explanation Debit May 5 Accounts Receivable Credit Refund Liability Sales (To record sales on account.) May 5 Cost of Goods Sold Merchandise Inventory (To record cost of goods sold.) May 7 Refund Liability Accounts Receivable (To record credit for goods returned.) May 7 Merchandise Inventory Cost of Goods Sold (To record cash sale.) May 10 (To record cost of goods sold.) May 12 (To record cash refund for goods returned.) May 12 (To record cost of damaged goods returned.) May 17 v Merchandise Inventory Estimated Inventory Returns Refund Liability
Transcribed Image Text:At the beginning of the current soccer season, on May 1, 2021, Fullback Sports has 92 soccer balls in inventory at $10 each. The company uses a perpetual inventory system and the contract-based approach for revenue recognition. Based on past experience. Fullback's management estimates returns at 20% of sales and has a stated return policy of 15 days from the date of sale. The following sales transactions occurred in May: May 5 Sold 15 soccer balls to Wolverine Soccer Club for $20 each, n/30. 7. Wolverine Soccer Club returned 3 of the balls after determining it had purchased more balls than it needed. Fullback gave Wolverine a credit on its account and returned the balls to inventory. 10 Sold 40 balls at $20 each to cash customers. 12 8 of the balls purchased for cash on May 10 were returned for cash because they were damaged. The balls were scrapped. Sold 19 balls to Spectre Community Club for $20 each, n/30. 17 31 Collected cash from Wolverine Soccer Club for the amount owing. Date Account Titles and Explanation Debit May 5 Accounts Receivable Credit Refund Liability Sales (To record sales on account.) May 5 Cost of Goods Sold Merchandise Inventory (To record cost of goods sold.) May 7 Refund Liability Accounts Receivable (To record credit for goods returned.) May 7 Merchandise Inventory Cost of Goods Sold (To record cash sale.) May 10 (To record cost of goods sold.) May 12 (To record cash refund for goods returned.) May 12 (To record cost of damaged goods returned.) May 17 v Merchandise Inventory Estimated Inventory Returns Refund Liability
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