To promote the sale of some specialty goods, Shamrock Ltd. began a generous return policy for its customers. Customers can return merchandise for up to three months following the date of the invoice, no questions asked. For the current period, sales of these specialty goods totalled $35,900. Shamrock chooses to estimate any expected sales returns at the end of each reporting period, rather than recording the Refund Liability at the point of sale. At the end of the reporting period, Shamrock estimates that outstanding returns will be $2,700. Assuming Shamrock follows IFRS, prepare the required adjusting journal entry at the end of the reporting period. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No Entry for the account titles and enter O for the amounts. List all debit entries before credit entries.) Account Titles and Explanation Refund Liability Debit Credit

To promote the sale of some specialty goods, Shamrock Ltd. began a generous return policy for its customers. Customers can return merchandise for up to three months following the date of the invoice, no questions asked. For the current period, sales of these specialty goods totalled $35,900. Shamrock chooses to estimate any expected sales returns at the end of each reporting period, rather than recording the Refund Liability at the point of sale. At the end of the reporting period, Shamrock estimates that outstanding returns will be $2,700. Assuming Shamrock follows IFRS, prepare the required adjusting journal entry at the end of the reporting period. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No Entry for the account titles and enter O for the amounts. List all debit entries before credit entries.) Account Titles and Explanation Refund Liability Debit Credit

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Douglas Corporation reports it sold merchandise on account for a total of $800,000 for the current year. The cost to Douglas for the merchandise was $300,000. To encourage early payment, Douglas offers its customers credit terms of 1/10, n/30. At year-end, there is $150,000 of sales on account still eligible for the 1 percent discount. Douglas believes that all customers will pay within the discount period to receive the discount. Prepare the adjusting journal entry needed for Douglas Corporation to comply with the new revenue recognition standard. Assume Douglas’s fiscal year-end is December 31.
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