Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Skysong-Air is selling a new model of high-efficiency air conditioner. To stimulate interest, Skysong-Air is granting certain large customers the unconditional right to return these

image text in transcribed
image text in transcribed
image text in transcribed
Skysong-Air is selling a new model of high-efficiency air conditioner. To stimulate interest, Skysong-Air is granting certain large customers the unconditional right to return these air conditioners if not fully satisfied. The right of return extends for six months. Skysong-Air estimates returns of 9%. Skysong-Air sells these air conditioners on account for $18,570,000 (cost $11,142,000) on April 2, 2017. Customers are required to pay the full amount due by June 15, 2017 Prepare the journal entry for Skysong-Air on April 2, 2017. Use the gross method to record sales. (Credit account titles are automatically indented when 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.) Account Titles and Explanation Debit Credit Accounts Receivable 18570000 18570000 Sales Revenue (To record sales) Cost of Goods Sold 11142000 11142000 Inventory (To record cost of goods sold) SHOW LIST OF ACCOUNTS LINK TO TEXT Assume that on May 15, 2017 one customer returns air conditioners that it purchased from Skysong-Air for 5416,000. Prepare the journal entry to record this transaction and the receipt of cash from customers on June 15, 2017. (Credit account titles are automatically indented when 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 May 15, 2017 Sales Returns and Allowances 415000 Accounts Receivable (To record sales returns) 416000 Inventory 249600 Cost of Goods Sold (To record cost of goods returned) 249600 June 15, 2017 Cash 11142000 Accounts Receivable Assume Skysong-Air prepares financial statements quarterly. Prepare the necessary entries (if any) to adjust Skysong-Air's financ results for the above transactions on June 30, 2017, assuming remaining expected returns of $1,210,000. (Credit account title are automatically indented when amount is entered. Do not indent manually. 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 retuns) (To record cost of goods retumed) SHOW LIST OF ACCOUNTS LINK TO TEXT Repeat parts (a) through (c) above assuming Slysong-Air uses the net method to record sales. (Credit account titles are automatically indented when 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 Tides and Explanation Debit Credit (To record sales) (To record cost of goods sold) (To record estimated returns) (To record sales retuns) (To record cost of goods retuned)

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image_2

Step: 3

blur-text-image_3

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Contemporary Auditing Real Issues And Cases

Authors: Michael C. Knapp

6th Edition

0324303254, 9780324303254

More Books

Students also viewed these Accounting questions