Page 53 - SBR Integrated Workbook STUDENT S18-J19
P. 53

Revenue









                   Example 3




                   Refunds


                   On 31 December 20X1, Thor sells and delivers 20,000 goods for $10 each.
                   The goods cost Thor $4 each. The customers pay cash on delivery.


                   Thor offers customers a full refund within 30 days of purchase.

                   Using significant past experience, Thor estimates that 300 of the goods will be
                   returned. Thor is confident that the actual level of returns is highly unlikely to
                   materially vary from this estimate.


                   How should these sales be accounted for in the financial statements for
                   the year ended 31 December 20X1?
















































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