Kiddy Inc. sold 5,000 children books to bookstores at $10 each on November 10, 20X1. Kiddy gives full refund if bookstores return its books within two months of delivery. Which choice includes all correct actions? 1. Kiddy should recognize no revenue for this sale on November 10, 20X1 if it has no experience in estimating book returns. 2. Kiddy may recognize $50,000 revenue and $2,500 sales returns on November 10, 20X1 if it has extensive experience in estimating book returns which is 5% of sales. 3. Kiddy should recognize revenue for this sale after the return period is over in January, 20X2 if it has no experience in estimating book returns. 4. Kiddy may recognize $50,000 revenue for this sale on November 10, 20X1 regardless of its experience in estimating book returns. 5. Kiddy may recognize $47,500 revenue and $2,500 refund liability on November 10, 20X1 if it has extensive experience in estimating book returns which is 5% of sales. 1, 2 and 3 2, 4 and 5 1, 3 and 5 1 and 5 1 and 3
Kiddy Inc. sold 5,000 children books to bookstores at $10 each on November 10, 20X1. Kiddy gives full refund if bookstores return its books within two months of delivery. Which choice includes all correct actions?
1. Kiddy should recognize no revenue for this sale on November 10, 20X1 if it has no experience in estimating book returns.
2. Kiddy may recognize $50,000 revenue and $2,500 sales returns on November 10, 20X1 if it has extensive experience in estimating book returns which is 5% of sales.
3. Kiddy should recognize revenue for this sale after the return period is over in January, 20X2 if it has no experience in estimating book returns.
4. Kiddy may recognize $50,000 revenue for this sale on November 10, 20X1 regardless of its experience in estimating book returns.
5. Kiddy may recognize $47,500 revenue and $2,500 refund liability on November 10, 20X1 if it has extensive experience in estimating book returns which is 5% of sales.
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