Paramount trading co sells watches to retailers with the

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Paramount Trading Co. sells watches to retailers with the right of return. Based on past experience Paramount estimates 20% returns of the annual sales. The Sales and returns data of Paramount for the year 2013 is given here.

Total Sales for 2013                           $5,000,000
2012 sales collected in 2013                $250,000
Credit granted for 2013 sales returns   $700,000
2012 sales returned in 2013                 $ 20,000

What amount of sales revenue should Paramount recognize for 2013. Prepare journal entries for sales and sales returns of 2013.

Reference no: EM13485115

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