Chapter 6 Assignment 2017_Due Week 4

Chapter 6 Assignment 2017_Due Week 4 - ACCT4200 Chapter 6...

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ACCT4200 Chapter 6 Assignment Due Hard Copy Beginning of Class Monday January 23 rd Name:______ Rahi Sheth ____________ Question 1 . Under contract, ABC Corporation delivers 500 units to Customer A for $200 each on 1 March. ABC's documented policy is to allow a customer to return any unused product within 30 days and receive a full refund. The cost of each product is $150. Based on historical experience, ABC estimates that 2% of the units will be returned. ABC expects that the returned products can be resold. On March 15 th , the customer returned 8 units to ABC. No other returns were received during month. Required: Record all of ABC Inc' journal entries for the month. General Journal Date Account Titles and Explanation Debit Credit Mar 1 Accounts Receivable – A $100,00 0 Sales Revenue $98,000 Refund Liability 2,000 Cost of Goods Sold 73500 Right to recovery asset 1,500 Inventory 75,000 Mar 15 Refund Liability 1,600 Accounts Receivable - A 1,600 Inventory 1,200 Right to recovery asset 1,200 Mar 31 Refund Liability 400 Sales Revenue 400 Cost of Goods Sold 300 Right to recovery asset 300
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