Teal Company is presently testing a number of new agricultural seed planters that it has recently developed. To stimulate interest, it has decided to grant to five of its largest customers the unconditional right of return to these products if not fully satisfied. The right of return extends for 4 months. Teal estimates returns of 20%. Teal sells these planters on account for $1,500,000 (cost $825,000) on January 2, 2020. Customers are required to pay the full amount due by March 15, 2020. (a) Your answer is correct. Prepare the journal entry for Teal at January 2, 202o. (Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No entry" for the account titles and enter O for the amounts.) Date Account Titles and Explanation Debit Credit Jan. 2, Accounts Receivable 1,500,000 2020 Sales Revenue 1,500,000 (To recognize revenue.) Cost of Goods Sold 825000 Inventory 825000 (To record cost of goods sold.)

Teal Company is presently testing a number of new agricultural seed planters that it has recently developed. To stimulate interest, it has decided to grant to five of its largest customers the unconditional right of return to these products if not fully satisfied. The right of return extends for 4 months. Teal estimates returns of 20%. Teal sells these planters on account for $1,500,000 (cost $825,000) on January 2, 2020. Customers are required to pay the full amount due by March 15, 2020. (a) Your answer is correct. Prepare the journal entry for Teal at January 2, 202o. (Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No entry" for the account titles and enter O for the amounts.) Date Account Titles and Explanation Debit Credit Jan. 2, Accounts Receivable 1,500,000 2020 Sales Revenue 1,500,000 (To recognize revenue.) Cost of Goods Sold 825000 Inventory 825000 (To record cost of goods sold.)

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 6MC

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Teal Company is presently testing a number of new agricultural seed planters that it has recently developed. To stimulate interest, it has decided to grant to five of its largest customers the unconditional right of return to these products if not fully satisfied. The right of return extends for 4 months. Teal estimates returns of 20%. Teal sells these planters on account for $1,500,000 (cost $825,000) on January 2, 2020. Customers are required to pay the full amount due by March 15, 2020. (a) Prepare the journal entry for Teal at January 2, 2020. (Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No entry" for the account titles and enter 0 for the amounts.) Date Account Titles and Explanation Debit Credit Jan. 2, 2020 (To recognize revenue.) (To record cost of goods sold.) eTextbook and Media
Wildhorse Company is presently testing a number of new agricultural seed planters that it has recently developed. To stimulate interest, it has decided to grant to five of its largest customers the unconditional right of return of these products if not fully satisfied. The right of return extends for 4 months. Wildhorse estimates returns of 20%. Wildhorse sells these planters on account for $1,400,000 (cost $700,000) on January 2, 2025. Customers are required to pay the full amount due by March 15, 2025. (a) Your answer is correct. Prepare the journal entry for Wildhorse at January 2, 2025. (Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No entry" for the account titles and enter O for the amounts. List all debit entries before credit entries.) Date Jan. 2, 2025 Jan. 2, 2025 Account Titles and Explanation Accounts Receivable Sales Revenue (To recognize revenue.) Cost of Goods Sold Inventory (To record…
Wildhorse Company is presently testing a number of new agricultural seed planters that it has recently developed. To stimulate interest, it has decided to grant to five of its largest customers the unconditional right of return of these products if not fully satisfied. The right of return extends for 4 months. Wildhorse estimates returns of 20%. Wildhorse sells these planters on account for $1,400,000 (cost $700,000) on January 2, 2025. Customers are required to pay the full amount due by March 15, 2025. (a) Prepare the journal entry for Wildhorse at January 2, 2025. (Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No entry" for the account titles and enter O for the amounts. List all debit entries before credit entries.) Date Account Titles and Explanation Jan. 2, 2025 Jan. 2, 2025 (To recognize revenue.) (To record cost of goods sold.) eTextbook and Media Save for Later List of Accounts Debit Attempts:…
Organic Growth Company is presently testing a number of new agricultural seed planters that it has recently developed. To stimulate interest, it has decided to grant to five of its largest customers the unconditional right of return to these products if not fully satisfied. The right of return extends for 4 months. Organic Growth estimates returns of 20%. Organic Growth sells these planters on account for $1,500,000 (cost $750,000) on January 2, 2020. Customers are required to pay the full amount due by March 15, 2020. Instructions a. Prepare the journal entry for Organic Growth at January 2, 2020. b. Assume that one customer returns planters on March 1, 2020, due to unsatisfactory performance. Prepare the journal entry to record this transaction, assuming this customer purchased $100,000 of planters from Organic Growth. c. Assume Organic Growth prepares financial statements quarterly. Prepare the necessary entries (if any) to adjust Organic Growth's financial results for the…
NASH COMPANY IS PRESENTLY TESTING A NUMBER OF NEW SEED PLANTERS THAT IT HAS RECENTLY DEVELOPED. TO STIMULATE INTEREST IT HAS DECIDED TO GRANT 5 OF ITS LARGEST CUSTOMERS THE UNCODITIONAL RIGHT OF RETURN TO THESE PRODUCTS IF NOT FULLY SATISFIED. THE RIGHT OF RETURN EXTENDS FOR 4 MONTHS. NASH ESTIMATES RETURNS OF 15%. NASH SELLS THESE PLANTERS ON ACCOUNT FOR 14000000(COST 630000) ON JAN 1 2020. CUSTOMERS ARE REQUIRED TO PAY THE FULL AMOUNT DUE BY MARCH 15 2020 ASSUME THAT ONE CUSTOMER RETURNS PLANTERS ON MARCH 1 2020 DUE TO UNSATISFACTORY PERFORMANCE. PREPARE THE JOURNAL ENTRY TO RECORD THIS TRANSACTION, ASSUMING THIS CUSTOMER PURCHASED 107,000 OF PLANTERS FROM NASH AND ALSO RECORDED THE ENTRY REQUIRED TO PAY THE FULL AMOUNT DUE BY MARCH 15,2020 TO RECORD SALES RETURNS TO RECORD COST OF GOODS RETURNED.
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Cullumber Company is presently testing a number of new agricultural seeds that it has recently harvested. To stimulate interest, it has decided to grant to five of its largest customers the unconditional right of return to these products if not fully satisfied. The right of return extends for 4 months. Cullumber sells these seeds on account for $1,560,000 (cost $702,000) on January 2, 2025, Customers are required to pay the full amount due by April 15, 2025. (a) Prepare the journal entry for Cullumber at January 2, 2025, assuming Cullumber estimates returns of 20% based on prior experience. (List all debit entries before credit entries. Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter O for the amounts) Date Account Titles and Explanation Jan. 2. 2025 Jan 2.2025 (To recognize revenue.) (To record cost of goods sold.) Debit Credit
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