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Question - Our book distribution division sells to national bookstores. Our division allows for up to 25% of sales in returns. For the past 4 years, returns have averaged 20%. We record revenue based on revenue recognition when the right of return exists.
Total Sales for 2012 $ 9,000,000
Sales Still Available for return for six months $ 2,000,000
Actual Returns on Sales not returnable 21%
2011 Sales collected in 2012 $ 2,500,000
2011 Sales returned in 2012 19%
Calculate the revenue to be recognized in fiscal year 2012 for each division of Peace book in accordance with generally accepted accounting principles. Show all calculations for full credit.
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