On July 10, 2020, Sweet Acacia Ltd. sold GPS systems to retailers on account for...
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On July 10, 2020, Sweet Acacia Ltd. sold GPS systems to retailers on account for a selling price of $940,000 (cost $752,000). Sweet Acacia grants the right to return systems that do not sell in three months following delivery. Past experience indicates that the normal return rate is 15%. By October 11, 2020, retailers returned systems to Sweet Acacia and were granted credits of $82,000. The company follows IFRS Prepare Sweet Acacia's journal entries to record the sale on July 10, 2020. (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 10. 2020 (To record sale) July 10 2020 (To record cost of goods sold) Date Account Titles and Explanation Debit Credit October 10, 2020 I (To record returns from customers) October 10, 2020 (To record return of inventory) October 10 2020 (To adjust refund liability for end of right of return) (To adjust refund liability for end of right of return) October 10. 2020 (To adjust cost of goods sold for end of right of return)
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