Chapter 8, Problem 8.21BE

Sales with the Right of Return. Both incorporated manufactures and sells processional ski equipment. Botti offers a money-back guarantee for one year after the date of purchase. Cash sales for the current year amounted to $620,000. Botti estimates that 5% of all sales are returned within the one-year period. Cost of goods sold is 75% of sales. The company uses a perpetual inventory system. Record sales and estimated sates returns for the current year.