The Jamison Appliance Company began business on January 1, 2010. The company decided from the beginning to grant allowances on merchandise traded in as partial payment on new sales. During 2011, the company granted trade-in allowances of $64,035. The wholesale value of merchandise traded in was $40,875. Trade-ins recorded at $39,000 were sold for their wholesale value of $27,000 during the year. The following summary entries were made to record annual sales of new merchandise and trade-in sales for 2011.

Accounts Receivable . . . . . . . . . . . . . . . . . . . . . . 439,890

Trade-In Inventory. . . . . . . . . . . . . . . . . . . . . . . . . 64,035

Sales . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 503,925

Cash . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27,000

Loss on Trade-In Inventory. . . . . . . . . . . . . . . . . . 12,000

Trade-In Inventory. . . . . . . . . . . . . . . . . . . . . . . . . 39,000

When a customer defaults on the accounts receivable contract, the merchandise is repossessed. During 2011, the following repossessions occurred:

The wholesale value of these goods is estimated as follows:
(a) Goods repossessed during year of sale are valued at 50% of original sales price.
(b) Goods repossessed in later years are valued at 20% of original sales price. Instructions:
1. At what values should Jamison Appliance report the trade-in and repossessed inventory at December 31, 2011?
2. Give the entry that should have been made to record the repossessions of 2011.
3. Give the entry that is required to correct the trade-in summaryentries.

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Original Sales Price Unpaid Contract Balance On 2010 contracts On 2011 contracts $37,500 24,000 $15,600 17,800