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Ivanhoe Growth Company is testing a number of new agricultural seeds that it has recently harvested. To stimulate interest, it has decided to grant five

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Ivanhoe Growth Company is testing a number of new agricultural seeds that it has recently harvested. To stimulate interest, it has decided to grant five of its largest customers the unconditional right to return these products if not fully satisfied. The right of return extends for four months. Ivanhoe Growth sells these seeds on account for $1,550,000 (cost $ 600,000) on April 2, 2020. Customers are required to pay the full amount due by June 15, 2020. The company follows IFRS. Assume that one customer returns the seeds on July 1, 2020. Prepare the journal entry to record this transaction, assuming this customer purchased $ 130,000 of seeds from Ivanhoe Growth. The customer had already paid by June 15 for the delivery. (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 July 1. 2020 Refund Liability 130000 130000 (To record return from customer) July 1, 2020 Returned Inventory 50322 50322 (To record return of inventory) Prepare the journal entry for Ivanhoe Growth at April 2, 2020, assuming Ivanhoe Growth estimates returns of 20% based on prior experience. Ivanhoe 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.) Debit Credit Date Account Titles and Explanation April 2. 2020 Accounts Receivable Sales Revenue (To record sale on account) April 2. 2020 Sales Returns and Allowances (To accrue for sales returns) April 2 2020 III (To record cost of goods sold) Assume that one customer returns the seeds on July 1, 2020. Prepare the journal entry to record this transaction, assuming this customer purchased $ 130,000 of seeds from Ivanhoe Growth. Ivanhoe follows ASPE. The customer had already paid by June 15 for the delivery. (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. Round answers to decimal places, eg. 5,275.) Date Account Titles and Explanation Debit Credit July 1, 2020 (To record return from customer) July 1, 2020 Returned Inventory (To record return of inventory)

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