Blendit (BLD) just developed new universal titanium replacementmixer blades. These replacement blades can be used in most mixerscurrently on the market. BLD is selling these blades with a rightof return for 30 days. On January 15, management believes it isprobable that 10% of the titanium blades sold will be returned.This belief is based on significant experience in estimatingreturns on other mixer blades BLD has developed and sold in thepast. BLD estimates the cost of processing any returned blades willbe insignificant. On January 15,Chef's Toolbox (CTX0 purchases andpays for 40 blades at a cost of $20 each. The cost to manufactureeach blade was $14. On January 31, BLD's assessment of potentialreturns had not changed from its assessment on January 15.Requirements: · Review ASC 606-10-05-04, ASC 606-10-32-2 through12, ASC 606-10-55-22 through 28 · Prepare a detailed explanation ofeach of the five steps of revenue recognition. Include referencesto the guidance to support your proposed accounting. Show anycalculations you make to support your journal entries. · Record allaccounting entries for BLD for the month of January based on thenew guidance on revenue recognition in ASC 606
