On october 2, 2020, martinez company sold $5,510 of its elite camping gear (with a cost of $3,470) to lynch outfitters. as part of the sales agreement, martinez includes a provision that if lynch is dissatisfied with the product, martinez will grant an allowance on the sales price or agree to take the product back (although returns are rare, given the long-term relationship between martinez and lynch). martinez expects total allowances to lynch to be $770. on october 16, 2020, martinez grants an allowance of $390 to lynch because the color for some of the items delivered was a bit different than what appeared in the catalog.