Problem
An entity sells 100 products for $100 each. Sales are 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 $60. 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 three products will be returned. 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.
Task
Prepare the journal entries to record the sale, and the subsequent return of the assets. Assume the goods are transferred to the customer on 1 June 2022.