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On July 10, 2020, Waterway Ltd. sold GPS systems to retailers on account for a selling price of $920,000 (cost $736,000). Waterway grants the right
On July 10, 2020, Waterway Ltd. sold GPS systems to retailers on account for a selling price of $920,000 (cost $736,000). Waterway grants the right to return systems that do not sell in three months following delivery. Past experience indicates that the normal return rate is 15%. By October 11, 2020, retailers returned systems to Waterway and were granted credits of $81,000. The company follows IFRS. Prepare Waterway's journal entries to record the $81,000 of actual returns on October 10, 2020. (Hint: Use Accounts Payable for the amount returned.) (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 October 10, 2020 October 10, 2020 (To record returns from customers) October 10,2020 (To record return of Inventory) October 10, 2020 (To adjust refund liability for end of right of return) (To adjust cost of goods sold for end of right of return) Debit Credit
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