Sandhill Publishing Co. publishes college textbooks that are sold to bookstores on the following terms Each title has a fixed wholesale price, terms fo.b, shipping point, and payment is due 60 days after shipment. The retailer may return a maximum of 30% of an order at the retailer's expense. Sales are made only to retailers who have good credit ratings, Past experience indicates that the normal return rate is 12% and the average collection period is 72 days. The company follows IFRS. Your answer is partially correct. On August 8, 2020, Sandhill shipped books invoiced at $24,000,000 (cost $19,000,000). Prepare the journal entry to record this transaction, including the expected returns. (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 for the amounts.) Date Account Titles and Explanation Debit Credit August 8. 2020 Account 000000 Date Account Titles and Explanation Debit Credit August 8. 2020 Accounts Receivable 24 000,000 Refund Liability Sales Reven III CON III (To record sale on account) August 8. 2020 Cost of Goods Sold Estimated Inventory Return Inventory (To record cost of goods sold) On October 3, 2020, $1,200.000 million of the invoiced July sales were returned according to the return policy and the remaining $22,800,000 million was paid. Prepare the journal entries for the return and payment. (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 for the amounts. Round answers to 0 decimal palces, e.g. 5,275.) Debit Credit Date Account Titles and Explanation October Refund boty 3.2020 24.000.000 Accounts Receivable 24.000.000 (To record return from customer) October 3. 2020 Cash 22.800,000 Accounts Receivable 22800.000 (To record return of Inventory) October 3,2020 Returned Inventory 19.000.000 Estimated Inventory Returns 19,000,000 (To record collection on account) On August 8, 2020, Sandhill shipped books invoiced at $24,000,000 (cost $19,000,000). Prepare the journal entry to record this transaction, including the expected returns Sandhill follows ASPE. (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 for the amounts.) Date Account Titles and Explanation Debit Credit August 8 2020 Nicoteca 24,000,000 Refund Liability 2.000.000 (To record sale on account) August B 2020 Sales Revenue Cost of Goods Sold (To accrue for sales returns) August 8. 2020 Costel Goodi sold August 8. 2020 Cost of Goods Sold TUD Estimated Inventory Returns Inventory (To record cost of goods sold) On October 3, 2020, $1.200.000 million of the invoiced July sales were returned according to the return policy, and the remaining $22,800,000 million was paid. Prepare the journal entries for the return and payment. Sandhill follows ASPE. (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.) Date Account Titles and Explanation Debit Credit October 3, 2020 Refund Liability 24,000,000 Accounts Receivable 24,000,000 (To record return from customer) October 3. 2020 Cash 22.800,000 Accounts Receivable 22,800,000 (To record return of inventory) October 3, 2020 Returned Inventory 19.000.000 Estimated Inventory Returns 19.000.000
