E17.16 (LO 3) Sales With Returns
On March 10, 2025, Steele Company sold tool sets to Barr Hardware with terms of n/60, f.o.b. shipping
point. Steele allows Barr to return any unused tool sets within 60 days of purchase. Steele estimates
the cost of recovering the products will be immaterial, and the returned tools sets can be resold at a
profit. On March 25, 2025, Barr returned some tool sets and received a credit to its account.
Information concerning the sale and return follows.
Number of tool sets sold 200
Selling price of each tool set $ 50.00
Cost of each tool set $ 30.00
Number of sets estimated to be returned 10
Number of tool sets returned by Barr 6
Instructions
a. Prepare journal entries for Steele to record (1) the sale on March 10, 2025, (2) the return on
March 25, 2025, and (c) any adjusting entries required on March 31, 2025 (when Steele prepares
financial statements). Steele believes the original estimate of returns is correct.
b. Indicate the income statement and balance sheet reporting by Steele at March 31, 2025, of the
information related to the Barr sales transaction.
NOTE: Enter a formula, a cell reference, or a value (if you are unable to reference a cell), into
the yellow shaded input cells.
a. 1. Debit Credit
03/10/25
2. Debit Credit
03/25/25
3. Debit Credit
03/31/25
,
, b. Income Statement (partial)
For the Month Ended March 31, 2025
Balance Sheet (partial)
At March 31, 2025
Current assets
Current liabilities
On March 10, 2025, Steele Company sold tool sets to Barr Hardware with terms of n/60, f.o.b. shipping
point. Steele allows Barr to return any unused tool sets within 60 days of purchase. Steele estimates
the cost of recovering the products will be immaterial, and the returned tools sets can be resold at a
profit. On March 25, 2025, Barr returned some tool sets and received a credit to its account.
Information concerning the sale and return follows.
Number of tool sets sold 200
Selling price of each tool set $ 50.00
Cost of each tool set $ 30.00
Number of sets estimated to be returned 10
Number of tool sets returned by Barr 6
Instructions
a. Prepare journal entries for Steele to record (1) the sale on March 10, 2025, (2) the return on
March 25, 2025, and (c) any adjusting entries required on March 31, 2025 (when Steele prepares
financial statements). Steele believes the original estimate of returns is correct.
b. Indicate the income statement and balance sheet reporting by Steele at March 31, 2025, of the
information related to the Barr sales transaction.
NOTE: Enter a formula, a cell reference, or a value (if you are unable to reference a cell), into
the yellow shaded input cells.
a. 1. Debit Credit
03/10/25
2. Debit Credit
03/25/25
3. Debit Credit
03/31/25
,
, b. Income Statement (partial)
For the Month Ended March 31, 2025
Balance Sheet (partial)
At March 31, 2025
Current assets
Current liabilities
