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.

(To record return from customer)

(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.

(To record sale on account)

(To accrue for sales returns)

(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.

(To record return from customer)

(To record return of inventory)