A double-declining balance method is a form of an accelerated depreciation method in which the asset value is depreciated at twice the rate it is done in the straight-line method. Since the depreciation is done at a faster rate (twice, to be precise) than the straight-line method, it is called accelerated depreciation.
On July 10, 2020, Waterway Ltd. sold GPS systems to retailers on account for a selling price of $780,000 (cost $624,000).
On July 10, 2020, Waterway Ltd. sold GPS systems to retailers on account for a selling price of $780,000 (cost $624,000). Waterway grants the right to return systems that do not sell in three months following delivery. Past experience indicates that the normal return rate is 15%. By October 11, 2020, retailers returned systems to Waterway and were granted credits of $74,000. The company follows IFRS. Prepare Waterway’s journal entries to record the sale on July 10, 2020. Prepare Waterway’s journal entries to record the $74,000 of actual returns on October 10, 2020. ( Hint: Use Accounts Payable for the amount returned.) Answer.
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