Carla Vista Choice sells natural supplements to customers with an unconditional sales return if they are not satisfied. The sales returns extends 60 days. On February 10, 2021, a customer purchases on account $3500 of products (cost $1750). Assuming that based on prior experience, estimated returns are 20%. The journal entry to record the expected sales return includes a debit to Cash and a credit to Sales Revenue of $3500. debit to Sales Returns and Allowance of $700 and a credit to Allowance for Sales Returns and Allowances of $700. credit to Estimated Inventory Returns of $350. debit to Cost of Goods Sold and credit to Inventory for $1750.
Carla Vista Choice sells natural supplements to customers with an unconditional sales return if they are not satisfied. The sales returns extends 60 days. On February 10, 2021, a customer purchases on account $3500 of products (cost $1750). Assuming that based on prior experience, estimated returns are 20%. The journal entry to record the expected sales return includes a debit to Cash and a credit to Sales Revenue of $3500. debit to Sales Returns and Allowance of $700 and a credit to Allowance for Sales Returns and Allowances of $700. credit to Estimated Inventory Returns of $350. debit to Cost of Goods Sold and credit to Inventory for $1750.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Carla Vista Choice sells natural supplements to customers with an unconditional sales return if they are not satisfied. The sales returns extends 60 days. On February 10, 2021, a customer purchases on account $3500 of products (cost $1750). Assuming that based on prior experience, estimated returns are 20%. The journal entry to record the expected sales return includes a
debit to Cash and a credit to Sales Revenue of $3500.
debit to Sales Returns and Allowance of $700 and a credit to Allowance for Sales Returns and Allowances of $700.
credit to Estimated Inventory Returns of $350.
debit to Cost of Goods Sold and credit to Inventory for $1750.
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