During 2019, Armstrong Technologies sold merchandise for a total of $1,800,000. The cost of merchandise to Armstrong was $1,350,000. Armstrong offers credit terms of 1/15, n/30 to encourage early payment. At year-end, there are $225,000 of sales still eligible for the 1% discount. Armstrong believes that all of the companies will pay within the discount period to receive the 1% discount. In addition, Armstrong allows a 60 day return period for the merchandise it sells. At year-end, Armstrong estimates there are $675,000 of sales (with a cost of $506,250 to Armstrong) that are still within the 60-day return period. From past experience Armstrong believes that 10% of this merchandise will be returned. Assume Armstrong's fiscal year is December 31.
Prepare the period-end adjusting journal entries needed for Armstrong Technologies to comply with the new revenue recognition standard.

Question

During 2019, Armstrong Technologies sold merchandise for a total of $1,800,000. The cost of merchandise to Armstrong was $1,350,000. Armstrong offers credit terms of 1/15, n/30 to encourage early payment. At year-end, there are $225,000 of sales still eligible for the 1% discount. Armstrong believes that all of the companies will pay within the discount period to receive the 1% discount. In addition, Armstrong allows a 60 day return period for the merchandise it sells. At year-end, Armstrong estimates there are $675,000 of sales (with a cost of $506,250 to Armstrong) that are still within the 60-day return period. From past experience Armstrong believes that 10% of this merchandise will be returned. Assume Armstrong's fiscal year is December 31. 
Prepare the period-end adjusting journal entries needed for Armstrong Technologies to comply with the new revenue recognition standard.

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The Answer of During 2019, Armstrong Technologies sold merchandise for a total of $1,800,000. The cost of merchandise to Armstrong was $1,350,000. Armstrong offers credit terms of 1/15, n/30 to encourage early payment. At year-end, there are $225,000 of sales still eligible for the 1% discount. Armstrong believes that all of the companies will pay within the discount period to receive the 1% discount. In addition, Armstrong allows a 60 day return period for the merchandise it sells. At year-end, Armstrong estimates there are $675,000 of sales (with a cost of $506,250 to Armstrong) that are still within the 60-day return period. From past experience Armstrong believes that 10% of this merchandise will be returned. Assume Armstrong's fiscal year is December 31. 
Prepare the period-end adjusting journal entries needed for Armstrong Technologies to comply with the new revenue recognition standard.

During 2019, Armstrong Technologies Sold Merchandise for a Total of $1,800,000