Question

Bridgeport 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. Bridgeport estimates returns of 15%. Bridgeport sells these seeds on account for $1,390,000 (cost $764,500) on January 2, 2017. Customers are required to pay the full amount due by March 15, 2017.

Prepare the journal entry for Bridgeport at January 2, 2017.

Answer 1

1/2/2017

Dr Accounts Receivable $1,390,000

Cr Sales Revenue $1,390,000

Dr Cost of Goods Sold $764,500

Cr Inventory $764,500

Step-by-step explanation:

Bridgeport Company Journal entry

1/2/2017

Dr Accounts Receivable $1,390,000

Cr Sales Revenue $1,390,000

Dr Cost of Goods Sold $764,500

Cr Inventory $764,500