Carla Vista Publishing Co. publishes college textbooks that are sold to bookstores on the following terms. Each title has a fixed wholesale price, terms f.o.b. shipping point, and payment is due 60 days after shipment. The retailer may return a maximum of 30% of an order at the retailer's expense. Sales are made only to retailers who have good credit ratings. Past experience indicates that the normal return rate is 12% and the average collection period is 72 days. The company follows IFRS. Your answer is partially correct. On August 8, 2020, Carla Vista shipped books invoiced at $23,000,000 (cost $18,000,000). Prepare the journal entry to record this transaction, including the expected returns. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter for the amounts.) Date Account Titles and Explanation Debit Credit August 8, 2020 Accounts Receivable 23,000,000 Allowance for Sales Returns and Allowances 2.760,000 Sales Revenue 20,240,000 IN THAT (To record sale on account) August 8, 2020 Cost of Goods Sold Estimated Inventory Returns Inventory 18,000,000 (To record cost of goods sold) On October 3, 2020, $1,500,000 million of the invoiced July sales were returned according to the return policy, and the remaining $21,500,000 million was paid. Prepare the journal entries for the return and payment. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter O for the amounts. Round answers to O decimal palces, e.g. 5,275.) Date Account Titles and Explanation Debit Credit October 3, 2020 Sales Returns and Allowances Accounts Receivable (To record return from customer) October 3, 2020 Inventory Cost of Goods Sold IIIII (To record return of inventory) October 3, 2020 Cash Accounts Receivable (To record collection on account) On August 8, 2020, Carla Vista shipped books invoiced at $23,000,000 (cost $18,000,000). Prepare the journal entry to record this transaction, including the expected returns. Carla Vista follows ASPE. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter for the amounts.) Date Account Titles and Explanation Debit Credit August 8, 2020 Accounts Receivable Sales Revenue (To record sale on account) August 8, 2020 Cost of Goods Sold Inventory on Consignment (To accrue for sales returns) August 8, 2020 III TO JIO (To record cost of goods sold) Your answer is partially correct. On October 3, 2020, $1,500,000 million of the invoiced July sales were returned according to the return policy, and the remaining $21,500,000 million was paid. Prepare the journal entries for the return and payment. Carla Vista follows ASPE. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter O for the amounts.) Date Account Titles and Explanation Debit Credit October 3, 2020 Sales Returns and Allowances Accounts Receivable (To record return from customer) October 3, 2020 Inventory on Consignment IOANE Cost of Goods Sold (To record return of inventory) II TE October 3, 2020 Cash Accounts Receivable (To record collection on account)
