6. On March 10, 2018, Hardwood 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. Hardwood allows Barr to return any unused tool sets within 60 days of purchase. Hardwood 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, 2018, Barr returned six tool sets and received a credit to its account. Required: Prepare journal entries for Hardwood to record (1) The sale on March 10, 2018 (2) The return on March 25, 2018 (3) Any adjusting entries required on March 31, 2018 (when Hardwood prepares financial statements). Hardwood believes the original estimate of returns is correct. Solution

6. On March 10, 2018, Hardwood 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. Hardwood allows Barr to return any unused tool sets within 60 days of purchase. Hardwood 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, 2018, Barr returned six tool sets and received a credit to its account. Required: Prepare journal entries for Hardwood to record (1) The sale on March 10, 2018 (2) The return on March 25, 2018 (3) Any adjusting entries required on March 31, 2018 (when Hardwood prepares financial statements). Hardwood believes the original estimate of returns is correct. Solution

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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