On June 1, Year 1, Charley Horse Company entered into a contract with Good Feed Company to purchase 1,000 bales of organic hay on January 30, Year 2, at a price of $30 per bale. The hay will be grown especially for Charley Horse and is needed to feed the company's herd of bison. On December 1, Year 1, Charley Horse sells its herd of bison. As a result, the company no longer has a need for the organic hay that will be delivered on January 30, Year 2, and the company does not believe it will be able to sell the hay to a third party. Charley Horse is able to cancel the contract with Good Feed for a cancellation fee of $20,000. Required: Determine what accounting entries, if any, Charley Horse Company should make on December 31, Year 1, related to the contract to purchase 1,000 bales of hay on January 30, Year 2.
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- Icicle Inc. buys and sells photocopy equipment that are used in businesses across Ontario. The company follow IFS. Unit selling prices range from $10,000 to $100,000. O • Icicle Inc. sells a printing machine to Frosty Inc. on June 14th, 2020. The selling price for the machine is usually $120,000. Icicle Inc. will also install the machine. The estimated fair value of installing the photocopy system is $5,000. Icicle Inc. sold the machine and installation to Frosty Inc. for $122,000. The machine cost Icicle Inc. $58,000. Frosty Inc. is obligated to pay Icicle Inc. $50,000 upon delivery of the machine and the balance on August 15th. O O O O Icicle Inc. delivers the machine on July 1st, 2020, and completes the installation of the machine on July 15th, 2020. On August 15 Frosty Inc. informs Icicle Inc. that they will be not be able to pay their account that is due. The two parties enter into an agreement that the account will be converted into a non-interest bearing promissory note to be…An entity cultivates cattle for the beef industry. On December 31, 2020 the entity's herds included 500, 18-month-old cattle. On December 2016 the quoted price for live cattle delivered to the local slaughterhouse to which the entity delivers its livestock is P 300 per 18-month-old animal. The slaughterhouse is located 25 miles from the entity's farmland where the cattle are raised. Carriers providing cattle transport services to the entity charge P65 per trip from the entity's farm to the slaughterhouse using a 10-cow carrier. No incremental selling costs arise on the sale to the slaughterhouse. On December 31, 2020 the fair value less costs to sell of the herd of cattle (biological assets) is a. P 117.500 b. P 119,935 c. P146,750 d. 150,000A grocery store chain and a farmer enter a forward contract for 10,000 bushels of wheat. The contract expires 3 months from today, and the store chain agrees to pay $7.50 per bushel. If the wheat price increases to $8.15 per bushel by contract expiration, calculate profit/loss for each party.
- On June 1, 2025, Oriole Company sells $185,000 of shelving units to a local retailer, Blue Spruce, which is planning to expand its stores in the area. Under the agreement, Blue Spruce asks Oriole to retain the shelving units at its factory until the new stores are ready for installation. Title passes to Blue Spruce at the time the agreement is signed. The shelving units are delivered to the stores on September 1, 2025, and Blue Spruce pays in full. Prepare the journal entries for this bill-and-hold arrangement (assuming that conditions for recognizing the sale as a bill-and-hold sale have been met) for Oriole on June 1 and September 1, 2025. The cost of the shelving units to Oriole is $89,000. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No entry" for the account titles and enter O for the amounts. List all debit entries before credit entries. Record journal entries in the order presented in the…On March 1, 2019, Elkhart enters into a new contract to build a specialized warehouse for 7 million. The promise to transfer the warehouse is determined to be a performance obligation. The contract states that if the warehouse is usable by November 30, 2019, Elkhart will receive a bonus of 600,000. For every week after November 30 that the warehouse is not usable, the bonus will decrease by 150,000. Elkhart provides the following completion schedule: Required: 1. Assume that Elkhart uses the expected value approach. What amount should Elkhart use for the transaction price? 2. Assume that Elkhart uses the most likely amount approach. What amount should Elkhart use for the transaction price? 3. Next Level What is the purpose of assessing whether a constraint on the variable consideration exists?On June 1, 2020, Vaughn Company sells $193,000 of shelving units to a local retailer, ShopBarb, which is planning to expand its stores in the area. Under the agreement, ShopBarb asks Vaughn to retain the shelving units at its factory until the new stores are ready for installation. Title passes to ShopBarb at the time the agreement is signed. The shelving units are delivered to the stores on September 1, 2020, and ShopBarb pays in full. Prepare the journal entries
- During 2019, Boge Corporation signed a noncancelable contract to purchase 10,000 bushels of soybeans at $5 per bushel with delivery to be made in 2020. On December 31, 2019, the price of soybeans had fallen to $4.50 per bushel. On May 1, 2020, Boge takes delivery of the soybeans when the price is $4.75 per bushel.Prepare the journal entries required on December 31, 2019, and May 1, 2020.On June 1, 2020, Bridgeport Company sells $172,000 of shelving units to a local retailer, ShopBarb, which is planning to expand its stores in the area. Under the agreement, ShopBarb asks Bridgeport to retain the shelving units at its factory until the new stores are ready for installation. Title passes to ShopBarb at the time the agreement is signed. The shelving units are delivered to the stores on September 1, 2020, and ShopBarb pays in full. Prepare the journal entries for this bill-and-hold arrangement (assuming that conditions for recognizing the sale as a bill-and-hold sale have been met) for Bridgeport on June 1 and September 1, 2020. The cost of the shelving units to Bridgeport is $88,000.On June 1, 2020, Mills Company sells $200,000 of shelving units to a local retailer, ShopBarb, which is planning to expand its stores in the area. Under the agreement, ShopBarb asks Mills to retain the shelving units at its factory until the new stores are ready for installation. Title passes to ShopBarb at the time the agreement is signed. The shelving units are delivered to the stores on September 1, 2020, and ShopBarb pays in full. Prepare the journal entries for this bill-and-hold arrangement (assuming that conditions for recognizing the sale as a bill-and-hold sale have been met) for Mills on June 1 and September 1, 2020. The cost of the shelving units to Mills is $110,000.
- Problem 1. At the beginning of the year, government agency purchases seven 1-year old pigs for P5,000 each. The following occurred during the period: • On June 30, 2021, twelve piglets were born. The FVLCS on this date is P1,500 each. • On July 1, 2021, three half-year old pigs were purchased for P3,500 each. • On December 31, 2021, fourteen piglets were born. FVLCS of which is P1,800 each. The FVLCS on December 31, 2021 are as follows: AGE FVLCS New born P1,800 0.5 year old P2,500 1 year old P4,500 2 years old P6,500 a. Compute for the change in FVLCS due to price change b. Compute for the change in FVLCS due to physical change c. Journal entry relating to the purchase on January 1, 2021. d. Journal entry relating to June 30, 2021 e. Journal entry relating to July 1, 2021 f. Journal entry relating to December 31, 2021 g. Total carrying amount of the pigs on December 31, 2021. Problem 2. An entity purchased a livestock for P100,000. Transportation…Show your computation On 1 January 2021, a company had a herd of 1,500 cows, all of which were 3 years old. At this date, the fair value less point of sale costs of the herd was $900,000. On 1 July 2021, the farmer purchased 500 cows (each two and half years old) for $700 each. As at 31 December 2021, The company sold 800 cows for $825 each. The herd also produced 2.5 tons milk that could be sold for $4 per kg in the market. Market auctioneers have charged a sales levy of 2% for each cow. Required: Discuss the accounting treatment of the above in the financial statements for the year ended 31 December 2021.Problem 1. At the beginning of the year, government agency purchases seven 1-year old pigs for P5,000 each. The following occurred during the period: • On June 30, 2021, twelve piglets were born. The FVLCS on this date is P1,500 each. • On July 1, 2021, three half-year old pigs were purchased for P3,500 each. • On December 31, 2021, fourteen piglets were born. FVLCS of which is P1,800 each. The FVLCS on December 31, 2021 are as follows: AGE FVLCS New born P1,800 0.5 year old P2,500 1 year old P4,500 2 years old P6,500 An entity purchased a livestock for P100,000. Transportation costs would be 15,000. 1. How much is the fair value of the livestock? 2. If there is no quoted price in an active market, the entity shall estimate the market price based on the following