Aamodt music sold cds to retailers and recorded sales


Question: Aamodt Music sold CDs to retailers and recorded sales revenue of $700,000. During 2014, retailers returned CDs to Aamodt and were granted credit of $78,000. Past experience indicates that the normal return rate is 15%. Prepare Aamodt's entries to record (a) the $78,000 of returns and (b) estimated returns at December 31, 2014.

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Accounting Basics: Aamodt music sold cds to retailers and recorded sales
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