Question

Oriole Ranch & Waterway is a distributor of ranch and farm equipment. Its products range from small tools, power equipment for trench-digging and fencing, grain dryers, and barn winches. Most products are sold direct via its company catalog and Internet site. However, given some of its specialty products, select farm implement stores carry Oriole’s products. Pricing and cost information on three of Oriole’s most popular products are as follows. Item Standalone Selling Price (Cost) Mini-trencher $ 3,600 ($2,000 ) Power fence hole auger 1,300 (900 ) Grain/hay dryer 13,800 (11,300 ) Respond to the requirements related to the following independent revenue arrangements for Oriole Ranch & Waterway.

(a) On January 1, 2017, Oriole sells 30 augers to Mills Farm & Fleet for $39,000. Mills signs a 6-month note at an annual interest rate of 12%. Oriole allows Mills to return any auger that it cannot use within 60 days and receive a full refund. Based on prior experience, Oriole estimates that 5% of units sold to customers like Mills will be returned (using the most likely outcome approach). Oriole’s costs to recover the products will be immaterial, and the returned augers are expected to be resold at a profit. Prepare the journal entry for Oriole on January 1, 2017. (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 0 for the amounts.) Account Titles and Explanation Debit Credit (To record sales) (To record cost of goods sold) Click if you would like to Show Work for this question: Open Show Work

Answer 1

ANSWER

Date	Particulars	Debit	Credit
Jan. 1, 2017	Accounts Receivable	39000
	Sales Revenue		39000
	(To Record Sales)
Jan. 1, 2017	Cost of Goods Sold	27000
	Inventory		27000
	(To record cost of goods sold)

_____________________________________________

If you have any query or any Explanation please ask me in the comment box, i am here to helps you.please give me positive rating.

*****************THANK YOU**************