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the color for some of the items delivered was a bit different than what appeared in the catalog. Prepare journal entries for Sunland to record (1) the sale on October 2, 2025, (2) the granting of the allowance on October 16, 2025, and, (3) any adjusting required on October 31, 2025 (when Sunland prepares financial statements). Sunland now estimates additional allowances of $240 will be granted to Novak in the future. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No entry" for the account titles and enter O for the amounts. List all debit entries before credit entries.) No Date Account Titles and Explanation Debit Cr

the color for some of the items delivered was a bit different than what appeared in the catalog. Prepare journal entries for Sunland to record (1) the sale on October 2, 2025, (2) the granting of the allowance on October 16, 2025, and, (3) any adjusting required on October 31, 2025 (when Sunland prepares financial statements). Sunland now estimates additional allowances of $240 will be granted to Novak in the future. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No entry" for the account titles and enter O for the amounts. List all debit entries before credit entries.) No Date Account Titles and Explanation Debit Cr

FINANCIAL ACCOUNTING
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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On October 2, 2025, Sunland Company sold $6,350 of its elite camping gear (with a cost of $3,670) to Novak Outfitters. As part of the sales agreement, Sunland includes a provision that if Novak is dissatisfied with the product, Sunland will grant an allowance on the sales price or agree to take the product back (although returns are rare, given the long-term relationship between Sunland and Novak). Novak expects total allowances to Novak to be $770. On October 16, 2025, Sunland grants an allowance of $390 to Novak because the color for some of the items delivered was a bit different than what appeared in the catalog. Prepare journal entries for Sunland to record (1) the sale on October 2, 2025, (2) the granting of the allowance on October 16, 2025, and, (3) any adjusting required on October 31, 2025 (when Sunland prepares financial statements). Sunland now estimates additional allowances of $240 will be granted to Novak in the future. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No entry" for the account titles and enter O for the amounts. List all debit entries before credit entries.) No Date (1) (2) Account Titles and Explanation (To record sales on account) (To record cost of goods sold) (To record allowance) (3) SUNLAND COMPANY Income Statement (Partial) $ $ Debit Cr Indicate the balance sheet reporting by Sunland at October 31, 2025, of the information related to the Novak transaction. SUNLAND COMPANY Balance Sheet (Partial)
Transcribed Image Text:On October 2, 2025, Sunland Company sold $6,350 of its elite camping gear (with a cost of $3,670) to Novak Outfitters. As part of the sales agreement, Sunland includes a provision that if Novak is dissatisfied with the product, Sunland will grant an allowance on the sales price or agree to take the product back (although returns are rare, given the long-term relationship between Sunland and Novak). Novak expects total allowances to Novak to be $770. On October 16, 2025, Sunland grants an allowance of $390 to Novak because the color for some of the items delivered was a bit different than what appeared in the catalog. Prepare journal entries for Sunland to record (1) the sale on October 2, 2025, (2) the granting of the allowance on October 16, 2025, and, (3) any adjusting required on October 31, 2025 (when Sunland prepares financial statements). Sunland now estimates additional allowances of $240 will be granted to Novak in the future. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No entry" for the account titles and enter O for the amounts. List all debit entries before credit entries.) No Date (1) (2) Account Titles and Explanation (To record sales on account) (To record cost of goods sold) (To record allowance) (3) SUNLAND COMPANY Income Statement (Partial) $ $ Debit Cr Indicate the balance sheet reporting by Sunland at October 31, 2025, of the information related to the Novak transaction. SUNLAND COMPANY Balance Sheet (Partial)
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