Respond to the requirements related to following independent revenue arrangements:

1) On June 1, Freedom shipped 100 TVs to Universal TV (Universal) on consignment. Freedom buys these TVs from their supplier for $600 each. Universal then retails them for $1,000 each, retain $150 and remit $850 to Freedom. On June 15, Universal sold 20 TVs and on June 20 paid the appropriate amount to Freedom. Prepare journal entries for Freedom and Universal for consignment arrangement on June 1, June 15, and June 20. 

2) On June 10, Freedom sold 200 sound systems to Loud & Noisy (LN) for $1,500 each on credit. Freedom buys these sound system from their suppliers for $1,000 each. LN has right to return the sound systems with in 90 days and receive full refund. Freedom estimates that 4% of units sold to LN will be returned. Freedom's cost to recover these sound systems will be immaterial and the returned sound systems are expected to resold at a profit. On August 7, 5 sound systems are returned by LN. Prepare the journal entries for Freedom on June 10 and August 7. 

3) On June 25, Freedom sold 50 computers on cash to Enterprise Corp (Enterprise) for $900 each. These computers has assurance warranty of 1 year. Estimated cost of assurance warranty is $20 for each. Prepare journal entry for Freedom on June 25. 

4) Canucks Inc., a software company sells new accounting software and user support bundled together. The fair value of the software is $1,500 and the fair value of the user support is $500. The user support is valid for a period of 12 months from the date of software purchase. To be able to compete with a competitor's offering, Loon decided to sell the bundle at a discount for $1,800. On June 15, Canucks sold one bundle of software and user support for cash. Prepare the journal entry for Canucks to record the sale on June 15 and adjusting entry if any at year end December 31.

Answer rating: 100% (QA)

In the Books of Freedom Journal Register Date Particulars Dr Cr Amount Amount June 1 Consignment ... View the full answer