2.   

Baby Boomers, Ltd.. had gross sales of $5,000,000 on credit during the year 2021. Sales returns and allowances in 2021 were $400,000 and trade discounts given to customers were $100,000. During 2021, the company also collected $4,000,000 cash from credit sales. The company uses the allowance method for bad debts, and at the end of 2021, the CFO of the company estimates that 1% of total credit sales will never be collectible. Few months later, in April 2022 a customer confirms the company that he will never pay $10,000. Required: (Solve this exercise on the reserved space from the ANSWER SHEET) a) Prepare a detailed presentation of the revenue section of the income statement for the year 2021. (0.5 points) b) Show the journal entries for the years 2021 and 2022. (1 point) Activate Wind