Answer the following independent parts.

PART I

Fitness Co. sells three products (A, B and C) to a customer for $66,000. Each product will be transferred to the customer at a different time. Product A is regularly sold separately for amounts between $25,000 and $30,000; products B and C are regularly sold together for consideration of $40,000 with their estimated stand-alone selling prices are $20,000 and $30,000 respectively.

REQUIRED: Using the residual approach under IFRS 15 (Contract with Customers) to determine how the transaction price should be allocated to products A, B, and C.

PART II

Fitness Co. sells new and used fitness equipment to large gyms and individual customers. On April 28, 2020, Fitness Co. sold exercise equipment costing $500,000 for $750,000. Since the sale was to a major fitness gym with many locations, Fitness Co. allowed returns until May 30th, and payment until June 15th. At the time of sale, management used their past experience with this customer and the specific equipment to estimate the returns at 5%. By the time the return period expired on May 30th, Fitness Co. had received returns with a total accumulated selling price of $30,000. Total amount owed was collected on June 5th. Fitness Co. has a fiscal year end December 31st and follows IFRS. Fitness Co. has a perpetual inventory system.

REQUIRED: Prepare the journal entry (entries) required to record 1) the actual return of $30,000; and 2) the adjustment needed to account for the expiration of the return rights (hint – sales). Assuming all prior transactions were recorded properly.