з уears of Internet service. The price for the tablet and a 3-year Internet connection service contract is $500. The standalone selling price of the tablet is $250 (the cost to Tablet Tailors is $175). Tablet Tailors sells the Internet access service independently for an upfront payment of $300. On January 2, 2020, Tablet Tailors signed 100 contracts, receiving a total of $50,000 in cash. I need help with the following entry: Debit Credit Jan. Cash 50,000 Account Name Account Name (To record revenue and unearned revenue for Jan. 2 revenue agreement.)

з уears of Internet service. The price for the tablet and a 3-year Internet connection service contract is $500. The standalone selling price of the tablet is $250 (the cost to Tablet Tailors is $175). Tablet Tailors sells the Internet access service independently for an upfront payment of $300. On January 2, 2020, Tablet Tailors signed 100 contracts, receiving a total of $50,000 in cash. I need help with the following entry: Debit Credit Jan. Cash 50,000 Account Name Account Name (To record revenue and unearned revenue for Jan. 2 revenue agreement.)

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

See similar textbooks

Similar questions

On January 1, 2019, Loud Company enters into a 2-year contract with a customer for an unlimited talk and 5 GB data wireless plan for $65 per month. The contract includes a smartphone for which the customer pays $299. Loud also sells the smartphone and monthly service plan separately, charging $649 for the smartphone and $65 for the monthly service for the unlimited talk and 5 GB data wireless plan. Required: 1. Calculate the transaction price for the smartphone and unlimited talk and 5 GB data wireless plan assuming that Loud allocates consideration based on stand-alone prices.2. Record the initial journal entry for Loud Company’s sale of a 2-year contract on January 1, 2019, and the monthly journal entry.
On November 1, 2021 a customer enters into a contract with MyWatch, Inc. to purchase an eWatch plus a one year internet data plan for the watch for a combined price of $700. Each item may be purchased separately from MyWatch, Inc. The standalone selling price of the eWatch is $500 and the standalone selling price of the one year internet data plan is $300. The customer pays MyWatch, Inc. $400 when the contract is signed. MyTWatch, Inc. bills the remaining $300 balance evenly over the contract period of one year. What is the correct accounting for the sale of the ewatch and the data plan? Question 19 options: a) MyWatch would record unearned revenue of $200 when the customer takes control of the ewatch. b) MyWatch would record sales revenue of $500 when the customer takes control of the ewatch. c) MyWatch would recored sales revenue of $438 when the customer takes control of the ewatch.…
Moon Ltd. sells custom made furniture on 24 months' interest free terms to qualifying customers. On 30 June 2023, Moon Ltd. sells $71,600 of furniture to Jessie Ltd., which cost $40,300, payable by 30 June 2025. By 30 June 2024, only 40% of the ordered furniture was delivered. The appropriate interest rate for this transaction is determined to be 11.20% per annum. Moon Ltd. uses perpetual system. By 30 June 2025, all payment was made, and the remaining furniture was delivered. Required: Question 4 Calculate the present value of the $71,600 to be received on 30 June 2025.
Value Dealership Inc. markets and sells the vehicles to retail customers. Along with a new vehicle purchase, a customer will receive a free annual maintenance contract for one year from the date of purchase. The standalone selling price of a vehicle is $30,000 and the standalone selling price for the annual maintenance contract is $500. During October 2020, Value Dealership Inc. sold 72 vehicles for $30,250 per vehicle, each with a free annual maintenance contract. Note: Carry all decimals in calculations; round the final answer to the nearest dollar. a.) Ignoring the cost entries, record the journal entry in October 2020 for Value Dealership’s sale of vehicles with the associated maintenance contracts to customers. b.) Assume the same information above except that the standalone selling price of the annual maintenance contract is not known because this was the first time Value Dealership offered the service. Value Dealership is uncertain as to what services, on average, a customer…
On January 1, 2019, Loud Company enters into a 2-year contract with a customer for an unlimited talk and 5 GB data wireless plan for $70.00 per month. The contract includes a smartphone for which the customer pays $299.00. Loud also sells the smartphone and monthly service plan separately, charging $659.00 for the smartphone and $70.00 for the monthly service for the unlimited talk and 5 GB data wireless plan. On July 1, 2019, the customer realizes that she needs less data in her wireless plan and downgrades to the unlimited talk and 2 GB data plan for the remaining term of the contract (18 months). The unlimited talk and 2 GB data plan is priced at $49.00 per month. The $49.00 per month is Loud’s current stand-alone price for this plan that is available to all customers. Required: 1. How should Loud account for this contract modification? 2. Provide Loud’s new monthly revenue recognition journal entry.
On January 1, 2019, Loud Company enters into a 2-year contract with a customer for an unlimited talk and 5 GB data wireless plan for $70.00 per month. The contract includes a smartphone for which the customer pays $299.00. Loud also sells the smartphone and monthly service plan separately, charging $659.00 for the smartphone and $70.00 for the monthly service for the unlimited talk and 5 GB data wireless plan. On July 1, 2019, the customer realizes that she needs less data in her wireless plan and downgrades to the unlimited talk and 2 GB data plan for the remaining term of the contract (18 months). The unlimited talk and 2 GB data plan is priced at $49.00 per month. The $49.00 per month is Loud’s current stand-alone price for this plan that is available to all customers. Required: 1. How should Loud account for this contract modification? 2. Provide Loud’s new monthly revenue recognition journal entry. 1. How should Loud account for this contract modification? The…
On January 1, 2019, Loud Company enters into a 2-year contract with a customer for an unlimited talk and 5 GB data wireless plan for $64.00 per month. The contract includes a smartphone for which the customer pays $299.00. Loud also sells the smartphone and monthly service plan separately, charging $649.00 for the smartphone and $64.00 for the monthly service for the unlimited talk and 5 GB data wireless plan. On July 1, 2019, the customer realizes that she needs less data in her wireless plan and downgrades to the unlimited talk and 2 GB data plan for the remaining term of the contract (18 months). The unlimited talk and 2 GB data plan is priced at $45.00 per month. The $45.00 per month is Loud’s current stand-alone price for this plan that is available to all customers.
SorCo. Inc. has just entered into a sale agreement with a customer. The contract is for $600,000. However, the payments will be made as follows: 1 August 20X1 on date of delivery $400,000; 1 August 20X2 $100,000 and 1 August 20X3 $100,000. SorCo has estimated that the interest rate required for this customer is 8%. SorCo follows IFRS. Required: Prepare the journal entry required to record the sale on 1 August 20X1 and the receipt of cash on 1 August 20X2 and 20X3. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field. Do not round intermediate calculations and round your final answers to the nearest whole dollar.)
ABC sells products to customers with a warranty. Customers can return the products to ABC for a free replacement within 90 days of purchase. During April 2022, ABC sold 1,500 products to customers. During May, ABC sold 1,800 products to customers. Based on past sales, ABC estimates that 5% of all products sold will be returned for a free replacement. The products cost ABC $20 to produce and they are sold for $35 per item. During April, 100 products were returned and during May, 120 items were returned. As of March 31, 2022, ABC's Warranty Liability had a credit balance of $12,000. If ABC had an inventory balance of $80,000 on March 31, 2022, what should the inventory balance be on April 30, 2022? No purchases of inventory were made during April or May, 2022. Please enter all amounts as a positive number with no dollar signs or commas. For example, if the answer is $2,100, enter 2100. THE ANSWER IS NOT : 49800 , 30000 , 14880 , 48000
Kane Candy Company sells candy bars for $1 each. In addition, Kane offers its customers a coffee mug in exchange for $2 and 10 candy wrappers. A coffee mug costs Kane $2.40, and the company estimates that customers will redeem 60 percent of the candy wrappers. During 2020, Kane purchased 720,000 mugs, sold 5,600,000 candy bars, and redeemed 2,800,000 candy wrappers. Instructions: 1. Prepare the journal entry to record the purchase of the coffee mugs. 2. Prepare the entry to record the sale of the candy bars. 3. Prepare the entry to record the redemption of candy wrappers, the receipt of $2 per 10 wrappers, and the delivery of the coffee mugs. 4. Prepare the adjusting entry to record additional premium expense and the estimated premium liability at Dec. 31, 2020. L
Kane Candy Company sells candy bars for $1 each. In addition, Kane offers its customers a coffee mug in exchange for $2 and 10 candy wrappers. A coffee mug costs Kane $2.40, and the company estimates that customers will redeem 60 percent of the candy wrappers. During 2020, Kane purchased 720,000 mugs, sold 5,600,000 candy bars, and redeemed 2,800,000 candy wrappers. Instructions: 1. Prepare the journal entry to record the purchase of the coffee mugs. 2. Prepare the entry to record the sale of the candy bars. 3. Prepare the entry to record the redemption of candy wrappers, the receipt of $2 per 10 wrappers, and the delivery of the coffee mugs. 4. Prepare the adjusting entry to record additional premium expense and the estimated premium liability at Dec. 31, 2020.
D'Mask Bhd sells 3 ply surgical face masks. On 1 January 2020, D'Mask entered a contract with Topeng Bhd under which Topeng Bhd was to purchase one box of the face masks at RM20 from D'Mask. The contract states that if Topeng Bhd purchases more than 5,000 boxes of masks in a year, the price per box is reduced retrospectively to RM18 per box (i.e. all purchases will be RM18 per box). D'Mask Bhd's year end is 31 December. As at 31 March 2020, Topeng Bhd bought 600 boxes from D'Mask. D'Mask therefore estimated that Topeng Bhd's purchases would not exceed 5,000 boxes in the year to 31 December 2020, and Topeng Bhd would therefore not be entitled to the volume discount. During the quarter ended 30 June 2020, due to high demand, Topeng Bhd purchased an additional 3,000 boxes of masks from D'Mask. D'Mask then estimated that Topeng Bhd's purchases would exceed the threshold for the volume discount in the year to 31 December 2020. Required: Compute the revenue D'Mask Bhd would recognise in the…