Question

Sunland Growth Company is testing a number of new agricultural seeds that it has recently harvested....

Sunland Growth Company is testing a number of new agricultural seeds that it has recently harvested. To stimulate interest, it has decided to grant five of its largest customers the unconditional right to return these products if not fully satisfied. The right of return extends for four months. Sunland Growth sells these seeds on account for $1,550,000 (cost $600,000) on April 2, 2020. Customers are required to pay the full amount due by June 15, 2020. The company follows IFRS.

Prepare the journal entry for Sunland Growth at April 2, 2020, assuming Sunland Growth estimates returns of 20% based on prior experience. Sunland follows ASPE. (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.)

Date

Account Titles and Explanation

Debit

Credit

April 2, 2020

(To record sale on account)

April 2, 2020

(To accrue for sales returns)

April 2, 2020

(To record cost of goods sold)

eTextbook and Media

List of Accounts

  

  

Assume that one customer returns the seeds on July 1, 2020.

Prepare the journal entry to record this transaction, assuming this customer purchased $120,000 of seeds from Sunland Growth. Sunland follows ASPE. (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. Round answers to 0 decimal places, e.g. 5,275.)

Date

Account Titles and Explanation

Debit

Credit

July 1, 2020

(To record return from customer)

July 1, 2020

(To record return of inventory)

Homework Answers

Answer #1

Solution

Date

Account titles and explanation

Debit

Credit

Apr 2, 2020 Accounts Receivable 15,50,000

Sales Revenue 15,50,000

(To record sales on account)

Apr 2,2020 Sales Revenue 120,000

Sale return & allowance 120,000

(To accrue for sale return)

Apr 2,2020 Cost of goods sold 600,000

Inventory 600,000

(To record cost of goods sold)


July 1,2020   Sales Returns & Allowances 120,000

  Accounts Receivable 120,000

  (To record sales returns)

July 1,2020   Returned Inventory 46,452

Cost of goods sold 46,452 (600,000/15,50,000 x 120,000)

( To record cost of goods returned)

Please give thumbs up :-)

Know the answer?
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Not the answer you're looking for?
Ask your own homework help question
Similar Questions
Blossom Company is presently testing a number of new agricultural seed planters that it has recently...
Blossom Company is presently testing a number of new agricultural seed planters that it has recently developed. To stimulate interest, it has decided to grant to five of its largest customers the unconditional right of return to these products if not fully satisfied. The right of return extends for 4 months. Blossom estimates returns of 15%. Blossom sells these planters on account for $1,570,000 (cost $785,000) on January 2, 2020. Customers are required to pay the full amount due by...
On April 1, 2020, Coronado Company assigns $550,000 of its accounts receivable to the Third National...
On April 1, 2020, Coronado Company assigns $550,000 of its accounts receivable to the Third National Bank as collateral for a $324,000 loan due July 1, 2020. The assignment agreement calls for Coronado to continue to collect the receivables. Third National Bank assesses a finance charge of 4% of the accounts receivable, and interest on the loan is 10% (a realistic rate of interest for a note of this type). Prepare the April 1, 2020, journal entry for Coronado Company....
On April 1, 2020, Indigo Corporation assigns $490,000 of its accounts receivable to First National Bank...
On April 1, 2020, Indigo Corporation assigns $490,000 of its accounts receivable to First National Bank as collateral for a $200,000 loan that is due July 1, 2020. The assignment agreement calls for Indigo to continue to collect the receivables. First National Bank assesses a finance charge of 4% of the accounts receivable, and interest on the loan is 8%, a realistic rate for a note of this type. Prepare the April 1, 2020 journal entry for Indigo Corporation. (Credit...
This information relates to Blossom Co.. 1. On April 5, purchased merchandise from Sunland Company for...
This information relates to Blossom Co.. 1. On April 5, purchased merchandise from Sunland Company for $28,800, terms 4/10, n/30. 2. On April 6, paid freight costs of $620 on merchandise purchased from Sunland Company. 3. On April 7, purchased equipment on account for $34,200. 4. On April 8, returned $3,500 of April 5 merchandise to Sunland Company. 5. On April 15, paid the amount due to Sunland Company in full. Prepare the journal entries to record the transactions listed...
On July 1, 2021, Pharoah Inc. entered into a contract to deliver one of its specialty...
On July 1, 2021, Pharoah Inc. entered into a contract to deliver one of its specialty machines to Kickapoo Landscaping Co. The contract requires Kickapoo to pay the contract price of $3,500 in advance on July 15, 2021. Kickapoo pays Pharoah on July 15, 2021, and Pharoah delivers the machine (with cost of $2,200) on July 31, 2021. Prepare the journal entry on July 1, 2021, for Pharoah. (Credit account titles are automatically indented when amount is entered. Do not...
O On August 1, 2020, Sunland Ltd. purchased a call option from Starco Corporation. The option...
O On August 1, 2020, Sunland Ltd. purchased a call option from Starco Corporation. The option gave Sunland the right to buy 7,700 shares in a third company, Dillon Ltd., at a price of $9 per share. On the day Sunland purchased the option, Dillon shares were trading at $9 each. Sunland paid $1,500 for the options. On August 31, 2020, the Dillon shares were trading at $11 each, and the options for Dillon shares were trading at $23,800. On...
On January 1, 2019, Metlock, Inc. issued $554,500, 14%, 10-year bonds at face value. Interest is...
On January 1, 2019, Metlock, Inc. issued $554,500, 14%, 10-year bonds at face value. Interest is payable annually on January 1. (a) Prepare the journal entry to record the issuance of the bonds. (Credit account titles are automatically indented when amount is entered. Do not indent manually.) Date Account Titles and Explanation Debit Credit Jan. 1 (b) Prepare the journal entry to record the accrual of interest on December 31, 2019. (Credit account titles are automatically indented when amount is...
On January 1, 2019, Metlock, Inc. issued $554,500, 14%, 10-year bonds at face value. Interest is...
On January 1, 2019, Metlock, Inc. issued $554,500, 14%, 10-year bonds at face value. Interest is payable annually on January 1. (a) Prepare the journal entry to record the issuance of the bonds. (Credit account titles are automatically indented when amount is entered. Do not indent manually.) Date Account Titles and Explanation Debit Credit Jan. 1 (b) Prepare the journal entry to record the accrual of interest on December 31, 2019. (Credit account titles are automatically indented when amount is...
Presented below is information related to copyrights owned by Cullumber Company at December 31, 2020. Cost...
Presented below is information related to copyrights owned by Cullumber Company at December 31, 2020. Cost $8,590,000 Carrying amount 4,430,000 Expected future net cash flows 4,190,000 Fair value 3,330,000 Assume that Cullumber Company will continue to use this copyright in the future. As of December 31, 2020, the copyright is estimated to have a remaining useful life of 10 years. Prepare the journal entry to record the impairment of the asset at December 31, 2020. The company does not use...
Blossom Company issued $579,000 of 9%, 10-year bonds on January 1, 2020, at face value. Interest...
Blossom Company issued $579,000 of 9%, 10-year bonds on January 1, 2020, at face value. Interest is payable annually on January 1. Your answer is incorrect. Try again. Prepare the journal entry to record the issuance of the bonds. (Credit account titles are automatically indented when amount is entered. Do not indent manually.) Date Account Titles and Explanation Debit Credit Jan. 1, 2020 LINK TO TEXT Your answer is partially correct. Try again. Prepare the journal entry to record the...
ADVERTISEMENT
Need Online Homework Help?

Get Answers For Free
Most questions answered within 1 hours.

Ask a Question
ADVERTISEMENT