Calculate the amount of revenue recognised by Hobart Ltd

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Question - During April 2020, Hobart Ltd sold 200 products on credit for $50 each. Customers may receive a full refund for any unused products returned within 30 days of sale. Each product costs $40. Based on past experience, Hobart Ltd estimates that 2 of the products will be returned during May. The cost of recovering the products will be immetarial and returned products can be resold at a profit.

Required -

a. Calculate the amount of revenue recognised by Hobart Ltd in April.

b. Assume that transactions occur in accordance with expectations. Prepare journal entries to record the return of products during May.

Reference no: EM132935415

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