On March $10,2025,$ Oriole Company sold to Blue Spruce Hardware $200$ tool sets at a price of $$47$ each $($cost $$30$ per set$)$ with terms of $\frac{n}{60},$ f$.$o$.$b$.$ shipping point. Oriole allows Blue Spruce to return any unused tool sets within $60$ days of purchase. Oriole estimates that $(1)10$ sets will be returned, $(2)$ the cost of recovering the products will be immaterial, and $(3)$ the returned tools sets can be resold at a profit. On March $25,2025,$ Blue Spruce returned $7$ tool sets and received a credit to its account.

$($a$)$

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Correct Answer $($Used$)$

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Prepare journal entries for Oriole to record $(1)$ the sale on March $10,2025,(2)$ the return on March $25,2025,$ and $(3)$ any adjusting entries required on March $31,2025($when Oriole prepares financial statements$).$ Oriole believes the original estimate of returns is correct. $($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. List all debit entries before credit entries.$)$

Jate

Account Titles and Explanation

$10,2025$

$10,2025$

Accounts Receivable

Sales Revenue

$($To record sales$)$

Debit

Credit

Credit

$($To record cost of goods sold$)$

$($To record sales returns$)$

$($To record cost of goods returned$)$

$($Adjusting entry for sales returns$)$

Estimated Inventory Returns

$($Adjusting entry for cost of goods sold$)$

$($b$1)$

Indicate the income statement reporting by Oriole at March $31,2025,$ of the information related to the Blue Spruce sales transaction.

ORIOLE COMPANY Income Statement $($Partial$)$

March $31,2025$

$

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