3--Where is the Recovery Asset reported in accordance with GAAP?

4--Explain how sales are to be recorded under the new revenue recognition standard.

5--Veronica's Apparel offers its customers the right to return any products purchased up to 45 days after the sale, for any reason. Last Thursday, Veronica's Apparel sold 100 blue cardigans to a variety of customers. Historically (based on experience), Veronica (owner of Veronica's Apparel) expects 20 of those cardigans to be returned for a full refund. On average, Veronica sells a cardigan for $125 and pays $50 to produce a cardigan. Prepare the entries to record the sale of the cardigans and expected refund liability and corresponding asset in accordance with GAAP. You may use traditional journal entries or the accounting equation to illustrate your entries. Please support your answer with well-labeled computations so that we can understand how you determined the amounts posted here.