On July 10, 2027, Cascade Audio sold vinyl records to retailers on account and recorded sales revenue of $840,000 (cost $672,000). Cascade Audio grants the right to return records that do not sell within 3 months following delivery. Past experience indicates that the normal return rate is 15%.
Instructions: Record Cascade Audio's journal entries for the sale on July 10, 2027, the $93,600 of returns received on October 11, 2027, and any entry necessary on October 31, 2027. Assume Cascade Audio prepares financial statements on October 31, 2027 and uses the gross method.