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General Accounting Discussions: Handling Returns

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    • CommentAuthorBlaine
    • CommentTimeJun 14th 2007
     
    Could some one help me WRT returns?

    Here is an example.

    Product A costs $100 (COGS) that I buy from the manufacture. I sell it for $150 + $10 shipping. Product A becomes defective (inside my warranty, outside the manufactures warranty). The customer sends it back and I send a new one for free (costs me $10 shipping so I am out $110). I ship it back to the manufacture ($20 to ship). It costs me $50 to repair + $20 to ship back to me ($70 total to get a new refurbished unit). I now add it to may inventory (and can sell it again later for $150 to another customer).

    How do I handle the return in the books for inventory control, extra cost for repairs, and COGS/Sales? I’m not clear on so many things regarding this. Does any one have some ideas or additional reading I can look at.
    Very much appreciated!!

    Thank you.

    Blaine
    • CommentAuthorjamesparker
    • CommentTimeDec 16th 2009 edited
     
    The best way is that you can take the best path that suites your WRT returns(it could be taking the best services)!

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