Botanic Choice sells natural supplements to customers with an unconditional sales retum if they are not satisfied. The sales returns extends 60 days. On February 10, 2018, a customer purchases $4,000 of products (cost $2,000). Assuming that based on prior experience, estimated returns are 20%. The journal entry to record the expected sales return and cost of goods sold includes A a debit to Allowance for Sales Returns of S800 and a credit to Cost of Goods sold of $400. B. debit to Cash and a credit to Sales Revenue of S4,000 C credit to Estimated Inventory Returns of $400 D.debt to Cost of Goods Sold and credit to inventory for $2,000

Botanic Choice sells natural supplements to customers with an unconditional sales retum if they are not satisfied. The sales returns extends 60 days. On February 10, 2018, a customer purchases $4,000 of products (cost $2,000). Assuming that based on prior experience, estimated returns are 20%. The journal entry to record the expected sales return and cost of goods sold includes A a debit to Allowance for Sales Returns of S800 and a credit to Cost of Goods sold of $400. B. debit to Cash and a credit to Sales Revenue of S4,000 C credit to Estimated Inventory Returns of $400 D.debt to Cost of Goods Sold and credit to inventory for $2,000

Intermediate Accounting: Reporting And Analysis

3rd Edition

ISBN:9781337788281

Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Chapter17: Advanced Issues In Revenue Recognition

Section: Chapter Questions

Problem 11RE

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