Culver Ranch & Larkspur is a distributor of ranch and farm equipment. Its products range from small tools, power equipment for trench-digging and fencing, grain dryers, and barn winches. Most products are sold direct via its company catalog and Internet site. However, given some of its specialty products, select farm implement stores carry Culver's products. Pricing and cost information on three of Culver's most popular products are as follows.

ItemStandalone

Selling Price (Cost)

Mini-trencher$ 4,000($2,100)

Power fence hole auger1,100(900)

Grain/hay dryer12,900(12,000)

Respond to the requirements related to the following independent revenue arrangements for Culver Ranch & Larkspur.

On January 1, 2017, Culver sells 50 augers to Mills Farm & Fleet for $55,000. Mills signs a 6-month note at an annual interest rate of 12%. Culver allows Mills to return any auger that it cannot use within 70 days and receive a full refund. Based on prior experience, Culver estimates that 5% of units sold to customers like Mills will be returned (using the most likely outcome approach). Culver's costs to recover the products will be immaterial, and the returned augers are expected to be resold at a profit. Prepare the journal entry for Culver on January 1, 2017

Culver sells three grain/hay dryers to a local farmer at a total contract price of $41,800. In addition to the dryers, Culver provides installation, which has a standalone selling price of $900 per unit installed. The contract payment also includes a $1,300 maintenance plan for the dryers for 3 years after installation. Culver signs the contract on June 20, 2017, and receives a 20% down payment from the farmer. The dryers are delivered and installed on October 1, 2017, and full payment is made to Culver. Prepare the journal entries for Culver in 2017 related to this arrangement.

On April 25, 2017, Culver ships 100 augers to Larkspur Depot, a farm supply dealer in Nebraska, on consignment. By June 30, 2017, Larkspur Depot has sold 70 of the consigned augers at the listed price of $1,100 per unit. Larkspur Depot notifies Culver of the sales, retains a 10% commission, and remits the cash due Culver. Prepare the journal entries for Culver and Larkspur Depot for the consignment arrangement.