Sandhill Growth Company is testing a number of new agricultural seeds that it has recently harvested....

Sandhill Growth Company is testing a number of new agricultural seeds that it has recently harvested. To stimulate interest, it has decided to grant five of its largest customers the unconditional right to return these products if not fully satisfied. The right of return extends for four months. Sandhill Growth sells these seeds on account for $1,700,000 (cost $600,000) on April 2, 2020. Customers are required to pay the full amount due by June 15, 2020. The company follows IFRS.

a)Prepare the journal entry for Sandhill Growth at April 2, 2020, assuming Sandhill Growth estimates returns of 20% based on prior experience

b)Assume that one customer returns the seeds on July 1, 2020. Prepare the journal entry to record this transaction, assuming this customer purchased $110,000 of seeds from Sandhill Growth.

c)Prepare the journal entry for Sandhill Growth at April 2, 2020, assuming Sandhill Growth estimates returns of 20% based on prior experience. Sandhill follows ASPE.

d)Assume that one customer returns the seeds on July 1, 2020.

Prepare the journal entry to record this transaction, assuming this customer purchased $110,000 of seeds from Sandhill Growth. Sandhill follows ASPE.

Solutions

Expert Solution

The following will be the entries for the SANDHILL GROWTH COMPANY

A) WORKING NOTES B)The other part (c) and (d) hae the same solutions as above.There will be no change in the journal entries in aspe and ifrs.

ekkarill92 answered 1 year ago

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