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In: Accounting
Crane Company is presently testing a number of new agricultural seeds that it has recently harvested....
Crane 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. Crane estimates returns of 10%. Crane sells these seeds on account for $1,370,000 (cost $685,000) on January 2, 2017. Customers are required to pay the full amount due by March 15, 2017.
Prepare the journal entry for Crane at January 2, 2017.
Assume that one customer returns the seeds on March 1, 2017, due to unsatisfactory performance. Prepare the journal entry to record this transaction, assuming this customer purchased $99,000 of seeds from Crane and also record the entry required to pay the full amount due by March 15, 2017.
Assume Crane prepares financial statements quarterly. Prepare the necessary entries (if any) to adjust Crane’s financial results for the above transactions on March 31, 2017, assuming remaining expected returns of $38,000.
Solutions
ekkarill92 answered 2 years agoRelated Solutions
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