B E 5 10 11 12 14 A D 1 Problem 3 [retroactive sales discount] 2 On March 1, 2020, ABC contracted with Best Buy to provide 1,000 televisions at a contracted price of 3 $450/cach. Delivery occurred on March 3, 2020. The sale was on account, and Best Buy made cash 4 payment 30 days after delivery. 6 The sale was subject to a retroactive volume discount whereby the per-unit sales price is reduced if total units purchased by Best Buy during the calendar year exceed certain thresholds, shown below. 7 8 9 Post- Cumulative sales Retroactive Discount Probability during the year are discount Price of Occuring 3500 units 16 $25/unit $425 17.5% 17 100% 18 ABC's beliefs about the likelihood of each event occurring are reported under the "probability of 19 occurring" column. 20 1. Prepare the journal entry needed to record the sale on the appropriate date using the expected value approach to measure variable consideration. Be sure to clearly identify the appropriate date for recognizing revenue on the sale 21 22 23 Enter your answer below. Choose the account from the drop-down list in the yellow cell. Enter the amount of the entry in the green box. 24 25 Entry on March 3, 2020: 26 Account Debit 27 Credit 28 29 1 30 1 1 31 A41 A B D E F SI 32 2. Assume that on September 1, 2020, management of ABC revises its beliefs, concluding that there is a 33 90% chance that Best Buy will buy only 2100 units during calendar year 2020 and a 10% chance that 34 ABC will buy 2600 units during calendar year 2020. Prepare journal entries that are needed on September 35 1, 2020. 36 37 Enter your answer below. Choose the account from the drop-down list in the yellow cell. Enter the amount of the entry in the green box. 38 39 Entry on September 1, 2020: 40 Account Debit Credit 41 2 42 2 43 44 3. Redo #1 and #2 assuming that ABC uses the most likely approach to measure variable consideration 45 46 Redo of #1 47 Enter your answer below. Choose the account from the drop-down list in the yellow cell. Enter the amount of the entry in the green box. 48 49 Entry on March 3, 2020: 50 Account Debit Credit 51 3 52 3 53 3 54 55 56 Redo of #2 57 Enter your answer below. Choose the account from the drop-down list in the yellow cell. Enter the amount of the entry in the green box. 58 59 Entry on September 1, 2020: 60 Account Debit 61 Credit 62 63 4 64