Question

Sheridan Company sells 300 units of its products for $15 each to Skysong Inc. for cash. Sheridan allows Skysong to return any unused product within 30 days and receive a full refund. The cost of each product is $6. To determine the transaction price, Sheridan decides that the approach that is most predictive of the amount of consideration to which it will be entitled is the probability- weighted amount. Using the probability-weighted amount, Sheridan estimates that (1) 9 products will be returned, and (2) the returned products are expected to be resold at a profit. Prepare the journal entries for Sheridan at the time of the sale to Skysong including any expected returns. The company follows IFRS. (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.) Account Titles and Explanation Debit Credit (To record cash sale) (To record cost of goods sold)

Answer 1

Anslues sales_felyans L A company sales gools on cash as well Cetit tassa It dellvers the goods to the customers customer will betur gods it geols are damaged or defective or not at per the policy of sales. It is saler Return " It reycer the queants receivalle ligbility to pay I foods in respect of goods soll on credit as well as cash lists. lit is the good condition is the goods pelly Sheridan_ompany Joyroo L Entries کا حلف | زنانه | Dr. 4500 Pyrhjul) ius Cash Ale (300 421tr8 $ 15) To Soles scuence Alc (ag) ynjts x $15) - Io Libility for Return of cools (9 yaits x $ 15) eens to record cash sales and the liability for goots return is recorted) 4361 135 Ovo [ 54 Il cost of Goak sold Ala ( 29) yoits X $6) Eshingles_Inventoret Returns Ale (9 ynj ty X$) _ To_ Inventory Ale (sco yaits x $61 (Being to record the cost of gools roll and estination of inuenbory neb4195 Total 6300 16:00