Part A: [6 marks] On January 1, 2018, Venden Inc. sells 100 cameras for $100 each for cash. Venden allows customers to return any unused cameras within 30 days for full cash refunds. The cost of each product is $60. Venden estimates that the probability of returns is 10%. Venden uses the expected value method (probability-weighted amount) to predict the revenues. On January 31, 2018 (the last day valid for product returns), the customers actually return 6 cameras for cash refunds. There are no product returns in any other days during this period. Required:

(a) Prepare journal entries on January 1, 2018. [3 marks]

(b) Prepare journal entries on January 31, 2018. [3 marks]

Part B: [5 marks] Morgan Ltd., an equipment dealer, sells equipment on August 1, 2019, to Lane Construction for $100,000 (cash sale). At the same time, both companies agree that Morgan Ltd will repurchase this equipment from Lane Construction on June 30, 2020, for a price of $111,000 (cash repurchase). Required:

1.Prepare journal entries for Morgan Ltd. on three dates: August 1, 2019, December 31, 2019, and June 30, 2020. [5 marks]