On March 10, 2025, Sandhill Company sold to Tamarisk Hardware 210 tool sets at a price of $52 each (cost $31 per set) with terms of n/60, f.o.b. shipping point. Sandhill allows Tamarisk to return any unused tool sets within 60 days of purchase. Sandhill 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, 2025, Tamarisk returned 7 tool sets and received a credit to its account. Assume that instead of selling the tool sets on credit, that Sandhill sold them for cash.

On March 10, 2025, Sandhill Company sold to Tamarisk Hardware 210 tool sets at a price of $52 each (cost $31 per set) with terms of n/60, f.o.b. shipping point. Sandhill allows Tamarisk to return any unused tool sets within 60 days of purchase. Sandhill 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, 2025, Tamarisk returned 7 tool sets and received a credit to its account. Assume that instead of selling the tool sets on credit, that Sandhill sold them for cash.

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Description: On March 10, 2025, Sandhill Company sold to Tamarisk Hardware 210 tool sets at a price of $52 each (cost $31 per set) with terms ofn/60, f.o.b. shipping point. Sandhill allows Tamarisk to return any unused tool sets within 60 days of purchase. Sandh

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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Concept explainers

Depreciation Methods

The word "depreciation" is defined as an accounting method wherein the cost of tangible assets is spread over its useful life and it usually denotes how much of the assets value has been used up. The depreciation is usually considered as an operating expense. The main reason behind depreciation includes wear and tear of the assets, obsolescence etc.

Depreciation Accounting

In terms of accounting, with the passage of time the value of a fixed asset (like machinery, plants, furniture etc.) goes down over a specific period of time is known as depreciation. Now, the question comes in your mind, why the value of the fixed asset reduces over time.

Topic Video

Question

On March 10, 2025, Sandhill Company sold to Tamarisk Hardware 210 tool sets at a price of $52 each (cost $31 per set) with terms of
n/60, f.o.b. shipping point. Sandhill allows Tamarisk to return any unused tool sets within 60 days of purchase. Sandhill 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, 2025, Tamarisk returned 7 tool sets and received a credit to its account. Assume that instead of selling the tool
sets on credit, that Sandhill sold them for cash.

Indicate the balance sheet reporting by Sandhill at March 31, 2025, of the information related to the Tamarisk sales.
Cash
Sales Returns and Allowances
Inventory
SANDHILL COMPANY
Balance Sheet (Partial)
March 31, 2025
LA
$
10764
-156
310

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