How do you journalize to record the repair costs

Reference no: EM132784515

Questions -

Q1) The store previously sold a $100 item to a customer. The store's cost of the item is $60. The item was defective, but you only refunded $70 of the sale price. In other words, the customer suffered a $30 loss partial loss. Is this the journal entry?

Dr. Sales Returns and Allowances $70

Cr. Cash $70

2) Normally, if you get an item returned, you make a journal entry to reflect that you have the item back. But since this is damaged, what do you do? And since they use the periodic inventory system, you don't usually make journal entries to inventory. So how do you journalize the items return?

3) You then spend $20 to repair the item. Once the item has been fixed, you can now sell it for $50. How do you journalize to record the repair costs? And now that it is fixed and worth $50, how do you record that? Or do you need to? Do you have to keep it separate from the rest of your other inventory because it is damaged?

Reference no: EM132784515

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