Answered

Join the IDNLearn.com community and get your questions answered by experts. Receive prompt and accurate responses to your questions from our community of knowledgeable professionals ready to assist you at any time.

On March 10, 2017, Steele Company sold to Barr Hardware 200 tool sets at a price of $50 each (cost $30 per set) with terms of n/60, f.o.b. shipping point. Steele allows Barr to return any unused tool sets within 60 days of purchase. Steele estimates that (1) 10 sets will be returned, (2) the cost of recovering the products will be immaterial, and (3) the returned tools sets can be resold at a profit. On March 25, 2017, Barr returned 6 tool sets and received a credit to its account.
Prepare journal entries for Steele to record (1) the sale on March 10, 2017, (2) the return on March 25, 2017, and (3) any adjusting entries required on March 31, 2017 (when Steele prepares financial statements). Steele believes the original estimate of returns is correct. (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 0 for the amounts.)

Sagot :

Parrainidn

Answer:

Date           Account Titles                                Debit                        Credit

March, 10  Accounts Receivables                  $10,000

                 Sales Revenue                                                              $10,000

               Cost of Good sold                           $6,000

                Inventory                                                                          $6,000

Working

Receivables = 200 tool sets * 50 = $10,000

COGS = 200 * 30 = $6,000

Date           Account Titles                                   Debit                        Credit

March, 25  Sales Returns and Allowances       $300

                  Accounts Receivable                                                        $300

                 Returned Inventory                         $180

                 Cost of Goods sold                                                             $180

Working:

Sales returns = 6 * 50 = $300

Cost of goods = 6 * 30 = $180

Estimated that 10 sets would be returned but only 6 were.

Date           Account Titles                                   Debit                        Credit

March, 25  Sales Returns and Allowances       $200

                  Allowance for Sales Returns                                             $200

                  and Allowances

                 Returned Inventory                            $120

                 Cost of goods sold                                                             $120

Working:

Sales returns = 4 * 50 = $200

COGS = 4 * 30 = $120

Thank you for contributing to our discussion. Don't forget to check back for new answers. Keep asking, answering, and sharing useful information. IDNLearn.com has the answers you need. Thank you for visiting, and we look forward to helping you again soon.