Question 7 (12 marks) Showhome Furniture Inc. is a manufacturer of stylish furniture and uses the perpetual system for recording their inventory. The company uses a 10%estimate for returns. Instructions: For each of the following four events, prepare the necessary journal entry in the books of Showhome Furniture as required. b. Clearly indicate if no entry is required. c. Show all calculations. a. 1. Showhome sold $50000 of sofas to a customer on account. The merchandise cost Showhome $15,000. The terms of the sale are n2, n/30 FOB destination. The goods were shipped on January 30, 2021 and received by the customer

Question 7 ( 12 marks) Showhome Furniture inc. is a manufacturer of stylish furniture and uses the perpetual system for recording their inventory. The company uses a 5% estimate for returns. Instructions: a. For each of the following four events, prepare the necessary journal entry in the books of showhome Furniture as required. b. Clearly indicate if no entry is required. c. Show all calculations. 1. Showhome sold $22,500 of sofas to a customer on account. The merchandise cost Showhome $15,000. The terms of the sale are 2/15,n/30 Fob destination. The goods were shipped on January 30,2021 and recelved by the customer on February 3,2023. 2. Freight costs of $1,625 were paid in cash on January 30,2023 3. On February 5, 2023 the customer returned 1$1,800 sofa to Showhome (which had cost Showhome $1,250 ) because they did not need it. Showhome returned the sofa to inventory 4. On February 13,2023 , the customer paid Showhome the remaining balance in full