During the year, Carrie Corporation sells merchandise on account totaling $4,000,000 with a cost of merchandise...
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During the year, Carrie Corporation sells merchandise on account totaling $4,000,000 with a cost of merchandise to Carrie of $2,000,000, Carrie offers its customers credit terms of 1/15, n/30, Carrie recognizes that there are $410,000 of sales on account still eligible for the 1 percent discount at year-end and believes that all companies will pay within the discount period. Additionally, Carrie allows a 90-day return privilege for the merchandise it sells. At year-end, Carrie estimates sales of $1,200,000 (with a cost to Carrie of $600,000) remain that are still within the 90-day return period. From past experience, 6 percent of this merchandise is expected to be returned. Prepare the period-end adjusting journal entries needed for Carrie Corporation to comply with the revenue recognition standard. Carrie Corporation's fiscal year-end is December 31. During the year, Carrie Corporation sells merchandise on account totaling $4,000,000 with a cost of merchandise to Carrie of $2,000,000, Carrie offers its customers credit terms of 1/15, n/30, Carrie recognizes that there are $410,000 of sales on account still eligible for the 1 percent discount at year-end and believes that all companies will pay within the discount period. Additionally, Carrie allows a 90-day return privilege for the merchandise it sells. At year-end, Carrie estimates sales of $1,200,000 (with a cost to Carrie of $600,000) remain that are still within the 90-day return period. From past experience, 6 percent of this merchandise is expected to be returned. Prepare the period-end adjusting journal entries needed for Carrie Corporation to comply with the revenue recognition standard. Carrie Corporation's fiscal year-end is December 31.
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Answer 1 Debit Accounts Receivable and Credit Sales for 1190000 1200000 6 x ... View the full answer
Related Book For
Principles Of Managerial Finance
ISBN: 978-0136119463
13th Edition
Authors: Lawrence J. Gitman, Chad J. Zutter
Posted Date:
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