Problem
Nelson Ltd publishes textbooks for schools, and sells them to bookstores on the following conditions: each item has a fixed wholesale price, and payment terms is 60 days after shipment. The retail store may return a maximum of 30% of an order at the retailer's expense. Past experience indicates that the average return rate is 12% and the average collection period is 72 days. Make a journal entry on August 1, 2016 than Nelson delivered books invoiced at 15,000,000 USD (cost of books is 12,000,000 USD).
Make a journal entry on November 3, 2016 than 1.5 mln. of the invoiced sales were returned according to the return policy and the remaining 13.5 mln was paid.
Make journal entry for the return and payment.