AP$4-5$B $($Revenue recognition$)$ Sound Sleeper Ltd$.$ manufactures and sells mattresses to retailers across Canada. In $2024,$ Sound Sleeper signed a two$-$year contract with Zzz Ltd$.$ to supply it with $40,000$ mattresses at a price of $\backslash (\backslash$$ $100\backslash )$ per unit. Sound Sleeper's cost to manufacture a mattress is $\backslash (\backslash$$ $25\backslash ).$ Sound Sleeper provides Zzz with $30-$day credit terms from the date of delivery. The following schedule summarizes the production, delivery, and payments in relation to the contract:

Required

a$.$ Determine how much revenue Sound Sleeper would be able to recognize in $2024$ and $2025.$ Use the five$-$step model for revenue recognition in preparing your response.

b$.$ Prepare the required summary journal entries for the contract based on your analysis in part $($a$),$

c$.$ How would your answer to part $($a$),$ change if Sound Sleeper allowed Zzz to return any mattresses that were returned by customers who found them uncomfortable? Based on experience, Sound Sleeper's management estimated a return rate of $\backslash (1\backslash \%\backslash )$ and that the mattresses being returned would be donated to local shelters.