Chapter 5, Problem 5.55AP

(Learning Objectives 1, 2: Apply GAAP for proper revenue recognition; account for sales returns and allowances) Treno Industries sells to wholesalers. Customers must pay within 15 days or at the point of sale using a credit card. Treno’s cost of goods sold is 40% of sates. The company had the following selected transactions during March:

March 3	Sold $15,000 of merchandise to Whittier Company on account.
March 4	Sold $2,000 of merchandise to Yeller Corp., who paid by credit card. The credit card company charges Treno a fee of 2% on credit card soles.
March 5	Whittier Company returned $500 of the merchandise from March 3.
March 7	Sold $600 of merchandise to Madison, Inc., on account.
March 15	Whittier Company paid the balance of what it owed for the purchase on March J.
March 19	Sold $22,000 of merchandise to Zucca Co. on account.
March 21	Zucca reported that some of the merchandise received was scratched and returned $1,000 worth of merchandise to Treno.
March 23	Sold $32,000 of merchandise to Nichols Co. on account.
March 25	Zucca paid the balance of what it owed or the purchase on March 19.
March 31	Treno made the adjusting entries for the month to accrue for estimated future returns. Trend estimates that 5% of total sales will be returned.

Requirements

1. 1. Record Treno’s transactions, including the cost of goods sold entry for each sale.
2. 2. Calculate the gross sales revenue for the month.