Provide the accounting entries to record the sale

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An entity sells 4100 products for $61 each. Saks arc made for cash, rather than on credit terms. The entity's customary business practice is to allow a customer to return any unused product within 30 days and receive a full refund. The cost of each product is $10. To determine the transaction price, the entity decides that the approach that is most predictive of the amount of consideration to which the entity will be entitled is the most likely amount. Using the most likely amount, the entity estimates that 61 products
will be returned. The entity's experience is predictive of the amount of consideration to which the entity will be entitled. The entity estimates that the costs of recovering the products will be immaterial and expects that the returned products can be resold at a profit.

Required:

Question 1: Provide the accounting entries to record the sale, and the subsequent return of the assets, assuming that the returns occur in accordance with expectations. The accounting entries would be:

Reference no: EM132787408

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