Faster-lah Bhd sells Products X on a sale or return basis to certain customers that it has built long term relationship.

The companys policy allows for sales to such qualified customers to be conducted with the right of the customer to return X that are deemed to be still in good quality within a period of up to 60 days post-delivery. This policy has been in place for a number of years.

The management has studied past returns patterns and based on past experience, Faster-lah Bhd estimate that 30% of products sold on a sale or return basis will be retuned within the 60 days period.

During the month May 2022, Faster-lah Bhd sold 300 units of product X to customers that qualify for the sale-or-return policy. The selling price of product X was RM10 per product. The sales margin for each unit of Product X is 25%.

Required:

Based on the information provided above, you are to advise on the appropriate accounting treatment that takes into account the policy of sale-or-return, for the month of May 2022, in which respect of the sale of 300,000 units of product X, based on the requirements of MFRS 15 Revenue from Contract with Customers.

(8 marks)