PART A- (12 marks)

Under contract, Rahim Corporation delivers 500 units to Customer A for $200 each on 1 March. Rahim's documented policy is to allow a customer to return any unused product within 30 days and receive a full refund. The cost of each product is $150. Rahim expects that the returned products can be resold. On March 15^th, the customer returned 8 units to Rahim. No other returns were received during the month. Required: Record all of Rahim Inc' journal entries for the month, assuming that Rahim cannot reasonably estimate the amount of returns on March 15th. (1 mark per entry)

PART B (8 marks)

Tara Inc. began work in 2020 on contract #3814, which provided for a contract price of $4,500,000. Other details follow:

	2020	2021
Costs incurred during the year	$800,000	$2,425,000
Estimated costs to complete as of December 31	2,400,000	0
Billings during the year	900,000	3,600,000
Collections during the year	600,000	3,900,000

Assume that Tara uses the percentage-of-completion method of accounting.

REQUIRED:

Calculate the portion of the total gross profit to be recognized as income in 2020.