On October 2, 2020,BrambleCompany sold $6,350of its elite camping gear (with a cost of $3,670) to Lynch Outfitters. As part of the sales agreement,Brambleincludes a provision that if Lynch is dissatisfied with the product,Bramblewill grant an allowance on the sales price or agree to take the product back (although returns are rare, given the long-term relationship betweenBrambleand Lynch).Brambleexpects total allowances to Lynch to be $770. On October 16, 2020,Bramblegrants an allowance of $390to Lynch because the color for some of the items delivered was a bit different than what appeared in the catalog.

On October 2, 2020, Bramble Company sold $6,350 of its elite camping gear (with a cost of $3,670) to Lynch Outtters. As part of the sales agreement, Bramble includes a provision that if Lynch is dissatised with the product, Bramble will grant an allowance on the sales price or agree to take the product back (although returns are rare, given the longterm relationship between Bramble and Lynch). Bramble expects total allowances to Lynch to be $770. On October 16, 2020, Bramble grants an allowance of $390 to Lynch because the color for some of the items delivered was a bit different than what appeared in the catalog. Preparejournal entries for Bramble to record (1) the sale on October 2, 2020, (2) the granting of the allowance on October 16, 2020, and, (3) any adjusting required on October 31, 2020 (when Bramble prepares nancial statements). Bramble now estimates additional allowances of $240 will be granted to Lynch in the future. (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 0 for the amounts.) No Account Titles and Explanation Debit Credit (1) Accounts Receivable 6350 Sales Revenue 6350 (To record sales on account) Cost of Goods Sold 3670 Inventory 3670 (To record cost of uoods sold) Indicate the income statement and balance sheet reporting by Bramble at October 31, 2020, of the information related to the Lynch transaction. Income Statement (partial) For the Quarter Ended October 31, 2020 V Sales revenue V $ 6350 Less V 2 Sales returns and allowances V 630 Net Sales V 5720 Cost of goods sold V v 35