Sarasota Company sold $8,780 of its specialty shelving to Elkins Office Supply Co. on account. Bridgeport estimates that an additional $215 in allowances will be granted to Elkins. Prepare the entries when Sarasota grants an allowance of $706 when some of the shelving does not meet exact specifications but still could be sold by Elkins. (If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts. Credit account titles are automatically indented when the amount is entered. Do not indent manually.)

See explanation section.

Explanation:

A) Accounts Receivable                                              $8,780    

   Sales Revenue                                                                      $8,780

Sarasota Company sold its specialty shelving to Elkins Office Supply Co. on account.

(b) Sales Returns and Allowances                              $215  

Allowances for Sales Returns and Allowances                      $215

To record an additional $215 in allowances to Elkins.

(c) Allowance for Sale Returns and Allowances        $706  

Accounts Receivable                                                               $706

To record an allowance of $706 when some of the shelving does not meet exact specifications. It means the products were damaged or defected.

the correct answer is economics is a game without winners or losers.

unlike sports or games economic is a game without losers or winner rather it is a game where everyone wins. parties of business doing businesses exchange money with each other and hence exchange is done on the basis of goods. one party takes the goods and other sales it so there is winner on both sides. each party values more highly the good it gets than the good it gives up. both sides exchange only because both intend to increase their value. so there is no concept of lose or win.

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