**Journal Entry Example: Teal Company**Teal Company is testing new agricultural seed planters. To encourage interest, it offers five major customers the option to return products if unsatisfied. The planters, worth $1,500,000 (with a cost of $825,000), are sold on account. Full payment is due by March 15, 2020.**Journal Entry for January 2, 2020***Accounts Involved:*1. **Accounts Receivable** - **Debit:** $1,500,000 2. **Sales Revenue** - **Credit:** $1,500,000 - *Explanation:* To recognize revenue from the sale.3. **Cost of Goods Sold** - **Debit:** $825,0004. **Inventory** - **Credit:** $825,000 - *Explanation:* To record the cost of goods sold.*Description:*This entry records the sale of planters and the associated cost. The debit to Accounts Receivable reflects the amount due from customers, while the credit to Sales Revenue recognizes the sales made. The cost of the planters is recorded with a debit to Cost of Goods Sold and a credit to Inventory, indicating the reduction in stock. **Educational Website Content: Journal Entry Instructions****Scenario:**Assume Teal prepares financial statements quarterly. Prepare the necessary entries (if any) to adjust Teal’s financial results for the above transactions on March 31, 2020, assuming remaining expected returns of $210,000.**Instructions:**- Credit account titles are automatically indented when amount is entered. Do not indent manually.- If no entry is required, select "No entry" for the account titles and enter 0 for the amounts.| Date | Account Titles and Explanation | Debit | Credit ||------------|------------------------------------------------------|-------|--------|| Mar. 31, 2020 | | | || | | | || *(To record sales returns)* | | || | | | || | | | || *(To record cost of goods returned)* | | |**Note:**Ensure that entries for both sales returns and the cost of goods returned are accurately recorded by entering the appropriate account titles and their respective amounts under the Debit and Credit columns.**Resources:**- [eTextbook and Media]Exploration and understanding of the accounting procedures and practices are critical for accurate financial reporting. Always verify and cross-check entries to maintain financial integrity and compliance with applicable accounting standards.

Introduction: Journals: Recording of a business transactions in a chronological order. First step in…

Teal Company is presently testing a number of new agricultural seed planters that it has recently developed. To stimulate interest, it has decided to grant to five of its largest customers the unconditional right of return to these products if not fully satisfied. The right of return extends for 4 months. Teal estimates returns of 20%. Teal sells these planters on account for $1,500,000 (cost $825,000) on January 2, 2020. Customers are required to pay the full amount due by March 15, 2020.

Teal Company is presently testing a number of new agricultural seed planters that it has recently developed. To stimulate interest, it has decided to grant to five of its largest customers the unconditional right of return to these products if not fully satisfied. The right of return extends for 4 months. Teal estimates returns of 20%. Teal sells these planters on account for $1,500,000 (cost $825,000) on January 2, 2020. Customers are required to pay the full amount due by March 15, 2020.

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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