Shamrock-Air is selling a new model of the high-efficiency air conditioner. To stimulate interest, Shamrock-Air is granting certain large customers the unconditional right to return these air conditioners if not fully satisfied. The right of return extends for six months. Shamrock-Air estimates returns of 9%. Shamrock-Air sells these air conditioners on account for $18, 040,000 (cost $11, 726,000) on April 2, 2017. Customers are required to pay the full amount due by June 15, 2017. 

(a) Prepare the journal entry for Shamrock-Air on April 2, 2017. Use the gross method to record sales.

(b) Assume that on May 15, 2017 one customer returns air conditioners that it purchased from Shamrock-Air for $427,000. Prepare the journal entry to record this transaction and the receipt of cash from customers on June 15, 2017.

Answer rating: 100% (QA)

A Prepare the journal entry for MarinAir on April 2 2017 Use the gross method to record sales ... View the full answer