BBB

You have been assigned to audit the sales return and allowance account for BBB Retail for the fiscal year ended 1/31/2021. You have been provided with the following information: - Information for use with BBB Retail document - Return Rotes database - Product Sales Summary database for November, 2020 - January, 2021 - Product Returns Summary database for November, 2020-January, 2021 - The client G/L reports an Allowance for Sales Returns of $3,100,000 as of 1/31/2021. - Your firm has set materiality for the Allowance for Sales Returns account at $1,200,000 - For the purposes of this exercise, assume that sales occur uniformly throughout the year and month and that all months have 30 days. Your firm has decided to try two approaches to estimating a valuation allowance for sales returns: a. First, your firm decides to estimate that 10% of all sales will eventually be returned. Using the data provided and the monthly returns information above, estimate the Allowance for Sales Returns as of 1/31/2021 You have been assigned to audit the sales return and allowance account for BBB Retail for the fiscal year ended 1/31/2021. You have been provided with the following information: - Information for use with BBB Retail document - Return Rotes database - Product Sales Summary database for November, 2020 - January, 2021 - Product Returns Summary database for November, 2020-January, 2021 - The client G/L reports an Allowance for Sales Returns of $3,100,000 as of 1/31/2021. - Your firm has set materiality for the Allowance for Sales Returns account at $1,200,000 - For the purposes of this exercise, assume that sales occur uniformly throughout the year and month and that all months have 30 days. Your firm has decided to try two approaches to estimating a valuation allowance for sales returns: a. First, your firm decides to estimate that 10% of all sales will eventually be returned. Using the data provided and the monthly returns information above, estimate the Allowance for Sales Returns as of 1/31/2021