Ivanhoe Choice sells natural supplements to customers with an unconditional sales return if they are not satisfied. The sales returns extends 60 days. On February 10, 2021, a customer purchases $3000 of products (cost $1500). Assuming that based on prior experience, estimated returns are 10%. The journal entry to record the expected sales return and cost of goods sold includesa O debit to Cash and a credit to Sales Revenue of $3000. O debit to Cost of Goods Sold and credit to Inventory for $1500. O debit to Sales Returns and Allowance of $300 and a credit to Allowance for Sales Returns and Allowances of $150. O credit to Estimated Inventory Returns of $150.
Ivanhoe Choice sells natural supplements to customers with an unconditional sales return if they are not satisfied. The sales returns extends 60 days. On February 10, 2021, a customer purchases $3000 of products (cost $1500). Assuming that based on prior experience, estimated returns are 10%. The journal entry to record the expected sales return and cost of goods sold includesa O debit to Cash and a credit to Sales Revenue of $3000. O debit to Cost of Goods Sold and credit to Inventory for $1500. O debit to Sales Returns and Allowance of $300 and a credit to Allowance for Sales Returns and Allowances of $150. O credit to Estimated Inventory Returns of $150.
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
Chapter17: Advanced Issues In Revenue Recognition
Section: Chapter Questions
Problem 11RE
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