Teal Company is presently testing a number of new agricultural seed planters that it has recently developed. To stimulate interest, ithas decided to grant to five of its largest customers the unconditional right of return to these products if not fully satisfied. The right ofreturn extends for 4 months. Teal estimates returns of 20%. Teal sells these planters on account for $1,500,000 (cost $825,000) onJanuary 2, 2020. Customers are required to pay the full amount due by March 15, 2020.(a)Your answer is correct.Prepare the journal entry for Teal at January 2, 2020. (Credit account titles are automatically indented when amount is entered. Do notindent manually. If no entry is required, select "No entry" for the account titles and enter O for the amounts.)DateAccount Titles and ExplanationDebitCreditJan. 2,Accounts Receivable1,500,0002020Sales Revenue1,500,000(To recognize revenue.)Cost of Goods Sold825000Inventory825000(To record cost of goods sold.)eTextbook and Media Assume Teal prepares financial statements quarterly. Prepare the necessary entries (if any) to adjust Teal's financial results for theabove transactions on March 31, 2020, assuming remaining expected returns of $210,000. (Credit account titles are automaticallyindented when amount is entered. Do not indent manually. If no entry is required, select "No entry" for the account titles and enter O for theamounts.)DateAccount Titles and ExplanationDebitCreditMar. 31,2020(To record sales returns)(To record cost of goods returned)eTextbook and Media

Introduction: Journals: Recording of a business transactions in a chronological order. First step in…

Teal Company is presently testing a number of new agricultural seed planters that it has recently developed. To stimulate interest, it has decided to grant to five of its largest customers the unconditional right of return to these products if not fully satisfied. The right of return extends for 4 months. Teal estimates returns of 20%. Teal sells these planters on account for $1,500,000 (cost $825,000) on January 2, 2020. Customers are required to pay the full amount due by March 15, 2020.

Teal Company is presently testing a number of new agricultural seed planters that it has recently developed. To stimulate interest, it has decided to grant to five of its largest customers the unconditional right of return to these products if not fully satisfied. The right of return extends for 4 months. Teal estimates returns of 20%. Teal sells these planters on account for $1,500,000 (cost $825,000) on January 2, 2020. Customers are required to pay the full amount due by March 15, 2020.

Intermediate Accounting: Reporting And Analysis

3rd Edition

ISBN:9781337788281

Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Chapter17: Advanced Issues In Revenue Recognition

Section: Chapter Questions

Problem 6MC

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Teal Company is presently testing a number of new agricultural seed planters that it has recently developed. To stimulate interest, it has decided to grant to five of its largest customers the unconditional right of return to these products if not fully satisfied. The right of return extends for 4 months. Teal estimates returns of 20%. Teal sells these planters on account for $1,500,000 (cost $825,000) on January 2, 2020. Customers are required to pay the full amount due by March 15, 2020. (a) Prepare the journal entry for Teal at January 2, 2020. (Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No entry" for the account titles and enter 0 for the amounts.) Date Account Titles and Explanation Debit Credit Jan. 2, 2020 (To recognize revenue.) (To record cost of goods sold.) eTextbook and Media
Wildhorse Company is presently testing a number of new agricultural seed planters that it has recently developed. To stimulate interest, it has decided to grant to five of its largest customers the unconditional right of return of these products if not fully satisfied. The right of return extends for 4 months. Wildhorse estimates returns of 20%. Wildhorse sells these planters on account for $1,400,000 (cost $700,000) on January 2, 2025. Customers are required to pay the full amount due by March 15, 2025. (a) Your answer is correct. Prepare the journal entry for Wildhorse at January 2, 2025. (Credit account titles are automatically indented when 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.) Date Jan. 2, 2025 Jan. 2, 2025 Account Titles and Explanation Accounts Receivable Sales Revenue (To recognize revenue.) Cost of Goods Sold Inventory (To record…
Wildhorse Company is presently testing a number of new agricultural seed planters that it has recently developed. To stimulate interest, it has decided to grant to five of its largest customers the unconditional right of return of these products if not fully satisfied. The right of return extends for 4 months. Wildhorse estimates returns of 20%. Wildhorse sells these planters on account for $1,400,000 (cost $700,000) on January 2, 2025. Customers are required to pay the full amount due by March 15, 2025. (a) Prepare the journal entry for Wildhorse at January 2, 2025. (Credit account titles are automatically indented when 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.) Date Account Titles and Explanation Jan. 2, 2025 Jan. 2, 2025 (To recognize revenue.) (To record cost of goods sold.) eTextbook and Media Save for Later List of Accounts Debit Attempts:…
Organic Growth Company is presently testing a number of new agricultural seed planters that it has recently developed. To stimulate interest, it has decided to grant to five of its largest customers the unconditional right of return to these products if not fully satisfied. The right of return extends for 4 months. Organic Growth estimates returns of 20%. Organic Growth sells these planters on account for $1,500,000 (cost $750,000) on January 2, 2020. Customers are required to pay the full amount due by March 15, 2020. Instructions a. Prepare the journal entry for Organic Growth at January 2, 2020. b. Assume that one customer returns planters on March 1, 2020, due to unsatisfactory performance. Prepare the journal entry to record this transaction, assuming this customer purchased $100,000 of planters from Organic Growth. c. Assume Organic Growth prepares financial statements quarterly. Prepare the necessary entries (if any) to adjust Organic Growth's financial results for the…
Cullumber Company is presently testing a number of new agricultural seeds that it has recently harvested. To stimulate interest, it has decided to grant to five of its largest customers the unconditional right of return to these products if not fully satisfied. The right of return extends for 4 months. Cullumber sells these seeds on account for $1,560,000 (cost $702,000) on January 2, 2025, Customers are required to pay the full amount due by April 15, 2025. (a) Prepare the journal entry for Cullumber at January 2, 2025, assuming Cullumber estimates returns of 20% based on prior experience. (List all debit entries before credit entries. 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) Date Account Titles and Explanation Jan. 2. 2025 Jan 2.2025 (To recognize revenue.) (To record cost of goods sold.) Debit Credit
NASH COMPANY IS PRESENTLY TESTING A NUMBER OF NEW SEED PLANTERS THAT IT HAS RECENTLY DEVELOPED. TO STIMULATE INTEREST IT HAS DECIDED TO GRANT 5 OF ITS LARGEST CUSTOMERS THE UNCODITIONAL RIGHT OF RETURN TO THESE PRODUCTS IF NOT FULLY SATISFIED. THE RIGHT OF RETURN EXTENDS FOR 4 MONTHS. NASH ESTIMATES RETURNS OF 15%. NASH SELLS THESE PLANTERS ON ACCOUNT FOR 14000000(COST 630000) ON JAN 1 2020. CUSTOMERS ARE REQUIRED TO PAY THE FULL AMOUNT DUE BY MARCH 15 2020 ASSUME THAT ONE CUSTOMER RETURNS PLANTERS ON MARCH 1 2020 DUE TO UNSATISFACTORY PERFORMANCE. PREPARE THE JOURNAL ENTRY TO RECORD THIS TRANSACTION, ASSUMING THIS CUSTOMER PURCHASED 107,000 OF PLANTERS FROM NASH AND ALSO RECORDED THE ENTRY REQUIRED TO PAY THE FULL AMOUNT DUE BY MARCH 15,2020 TO RECORD SALES RETURNS TO RECORD COST OF GOODS RETURNED.
On February 1, 2020, Baby Goats Unlimited took out a loan from Local City Bank for $300,000. It was a 2-year note at 5% interest, payable in 24 months with no payments due until then. Immediately, Baby Ġoats Unlimited transferred $150,000 of it to LivestockGen, a company that sells high tech goat breeding equipment. This represented a 50% down payment on an agreed upon $300k total contract to buy technology equipment. The remainder was put in a money market fund earning 1.2% interest until October 1, 2020 when the final payment was due to LivestockGen. On Oct 1 the remaining money was transferred from Baby Goats Unlimited to LivestockGen. Please prepare journal entries for the transactions described above.
Regasco Gas Co. grants its customers one reward point per P100 sales. Each point is equivalent to P1. The points accumulated may be used as payment for gas purchased. During the year 2022, the company's sales amounts to P8,000,000. Of the 8,000,000 sales, 8% is considered as allocable to customer loyalty awards. It is expected that 50,000 points will be redeemed. But at the end of 2022, only 35,000 points was redeemed. How much s the liability for loyalty awards to be presented in the balance sheet for the year 2022?
In September 2020, Gaertner Corp. commits to selling 150 of its iPhone-compatible docking stations to Better Buy Co. for $15,000 ($100 per product). The stations are delivered to Better Buy over the next 6 months. After 90 stations are delivered, the contract is modified and Gaertner promises to deliver an additional 45 products for an additional $4,275 ($95 per station). All sales are cash on delivery. Instructions a. Prepare the journal entry for Gaertner for the sale of the first 90 stations. The cost of each station is $54. b. Prepare the journal entry for the sale of 10 more stations after the contract modification, assuming that the price for the additional stations reflects the standalone selling price at the time of the contract modification. In addition, the additional stations are distinct from the original products as Gaertner regularly sells the products separately. c. Prepare the journal entry for the sale of 10 more stations (as in (b)), assuming that the pricing…
Blackstone Company purchased a new software system costing $35,000. To finance the purchase, Blackstone signed a contract agreeing to pay the cost over the next 8 years, with a payment due every six months; the first payment will be made six months from the date of purchase. Blackstone's usual interest rate is 10%. What is the amount of the payment required (rounded to the nearest dollar)? 's usual 096, What is the amount of the Select one: O a. 16,030 O b. 6,560 O c. 3,229 d. 2,575 e. None of the above
Sosa Excavating Inc. is purchasing a bulldozer. The equipment has a price of $100,000. The manufacturer has offered a payment plan that would allow Sosa to make 10 equal annual payments of $16,274.53, with the first payment due one year after the purchase. Instructions(a) How much total interest will Sosa pay on this payment plan?(b) Sosa could borrow $100,000 from its bank to finance the purchase at an annual rate of 9%. Should Sosa borrow from the bank or use the manufacturer’s payment plan to pay for the equipment
Mowbot Company is evaluating the production of a new part. It would require the acquisition of aspecial CNC lathe costing $375,000. The machine would be used for five years then sold for $135,000. Mowbot’s MARR is 15%. In addition to the sales quotation, the sales representative has quoted a five yearlease for $81,000 per year, with the first year’s payment due on delivery. Based on pretax analysis,should Mowbot choose leasing or buying? The lathe is expected to result in added profit (income in excess of costs) of $90,000 per year. Based on the choice of leasing or buying from above, does this make the project viable (should Mowbot pursue the machine?) The lathe sales representative has offered to reduce the initial lease payment to $61,000.year. Should Mowbot choose leasing or buying on these terms? Based on the revised quotation, is the project viable? (Should Mowbot acquire the lathe?)