Sarasota Company enters into a contract to sell $9,800 of merchandise, n/30. The cost of the merchandise to Sarasota is $4,200. Sarasotas management uses the expected value method to estimate returns and has the following information from similar contracts: 45% of the time, returns are 15% of sales and 55% of the time, returns are 10% of sales. The performance obligation was completed on September 20.

(a)

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Calculate the transaction price for this sale assuming the company follows IFRS and uses the expected value method to estimate returns. (Round answer to 0 decimal places, e.g. 5,125.)

Transaction price

$

List of Accounts

Attempts: 1 of 1 used

(b)

Prepare the journal entry to record the sale, ignoring any entries required for estimated inventory returns, cost of goods sold, and merchandise inventory. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. Record journal entries in the order presented in the problem. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts.)

Account Titles and Explanation	Debit	Credit
(To record sales on account.)