Sunland Growth Company is testing a number of new agricultural seeds that it has recently harvested. To stimulate interest, it has decided to grant five of its largest customers the unconditional right to return these products if not fully satisfied. The right of return extends for four months. Sunland Growth sells these seeds on account for $1,550,000 (cost $600,000) on April 2, 2020. Customers are required to pay the full amount due by June 15, 2020. The company follows IFRS. Prepare the journal entry for Sunland Growth at April 2, 2020, assuming Sunland Growth estimates returns of 20% based on prior experience. (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 April 2 2020 1.550,000 Accounts Receivable Sales Revenue 1,240,000 Refund Liability 310,000 (To record sale on account) April 2, Cost of Goods Sold 600,000 2020 Inventory 600,000 (To record cost of goods sold) Assume that one customer returns the seeds on July 1, 2020. Prepare the journal entry to record this transaction, assuming this customer purchased $120,000 of seeds from Sunland Growth. (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 July 1. Sales Returns and Allowances 120.000 2020 Accounts Receivable 120,000 (To record return from customer) July 1. Returned Inventory 2020 Cost of Goods Sold 46,452 (To record return of inventory) 46,452 Prepare the journal entry for Sunland Growth at April 2, 2020, assuming Sunland Growth estimates returns of 20% based on prior experience. Sunland 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.) Debit Credit Date Account Titles and Explanation April 2. 2020 (To record sale on account) April 2 2020 (To accrue for sales returns) April 2, 2020 (To record cost of goods sold) Assume that one customer returns the seeds on July 1, 2020. Prepare the journal entry to record this transaction, assuming this customer purchased $120,000 of seeds from Sunland Growth. Sunland 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. Round answers to decimal places, e.g. 5,275.) Debit Credit Date Account Titles and Explanation July 1, 2020 (To record return from customer) July 1 2020 (To record return of inventory)
