Under contract, Sojourn Co. delivers 1,000 units to Customer A for $50 each on 1 April. Sojourns
Question:
Under contract, Sojourn Co. delivers 1,000 units to Customer A for $50 each on 1 April. Sojourn’s documented policy is to allow a customer to return any unused product within 90 days and receive a full refund. The cost of each product is $35. On the basis of historical experience, Sojourn estimates that 4% of the units will be returned. Sojourn expects that the returned products can be resold.
Required:
Record the journal entries to be made by Sojourn on 1 April to recognize the sale.
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Since the returns can be estimated Sojourn estimates revenue to be the most likely consideration it ...View the full answer
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Related Book For 
Intermediate Accounting Volume 1
ISBN: 9781260306743
7th Edition
Authors: Thomas H. Beechy, Joan E. Conrod, Elizabeth Farrell, Ingrid McLeod Dick
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