Chapter 11 question
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British Columbia Institute of Technology *
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Course
234
Subject
Industrial Engineering
Date
Dec 6, 2023
Type
docx
Pages
3
Uploaded by AdmiralHawk3315
E:11.4
1.
Written Contract
2.
Perform one month of legal service to J and J home inspections
3.
5000
4.
No
5.
At the end of the month
P11.3A
Is there a contract? If so, describe the contract.
Yes, there is a contract. Deliver 1 tree today and remove tree Jan 3.
What is Santa’s Holiday Farm’s performance obligation(s)?
Santa’s Holiday Farm has performance obligation, which is to provide a fir tree on
December 2 2024 and removal service to the customer on January 3, 2025
What is the transaction price?
December 2
nd
total=200 times 60=12000
Is there a need to allocate the transaction price? (there is because the removal part of
January 3 was not satisfied yet since only December 2
nd
was stated)
Yes
Tree
50
50/70=71.43% times 60=42.86 times 200=8572
Removal
20
20/70=28.57% times 60=17.14 times 200=3472
70
Has the performance obligation(s) been satisfied? If so, when?
The performance obligation is satisfied on the day of delivery of the holiday package
(tree sale/delivery), which is December 2, 2024.
Removal- has not been satisifed January 3, 2025
Journal Entries:
To record the sale of 200 holiday packages:
December 2, 2024
Cash $12,000 ($60 x 200)
Sales Revenue
8572
Unearned Service REVENUE 3428
Cost of goods sold $3,000 ($15 x 200)
Inventory $3,000
January 3, 2025
Unearned service revenue 3428
Service Revenue 3428
P11.6
you dont need speed in investment and also snapchat 8.7 sales went down by 7 percent
and stock went down by 20, inflation rate 4.3, first republic bank failed,
July
Aug 25
Sept 15
Sept 25
Contract date
-----
Delivery date
-----
10 books return-----
PMT due
----
Sept 20
November 25
20 book return-----
Right of returning expire
The contract with the customer is between Nicolet Publishers and Hinton University for the
supply of 300 accounting textbooks.
Nicolet's performance obligation is to supply 300 accounting textbooks to Hinton University.
300 times 110 times the estimate return (100-10%)=29700
Revenue should be recognized when Nicolet has satisfied its performance obligation, which is
upon delivery of the textbooks on August 25, 2024.
August 25, 2024
Accounts Receivable (300 times 110)
Refund liability (33000times0.1)
3300
Sales Revenue
29700
(To record the sale of 300 textbooks to Hinton University)
Cost of Goods Sold (300 times 80 -2400 ) $21,000
Estimated Inventory Returns (300 times 80 times 10 percent) 2400
Inventory $24,000
(To record the cost of the textbooks sold)
September 15, 2024
Refund Liability $1,100 (10 times 110)
Accounts Receivable $1,100
Inventory (10 times 80)800
Estimated Inventory Returns
800
(To record the return of 10 textbooks by Hinton University)
September 25, 2024
Cash (33000-1100) 31900
Accounts Receivable 31900
September 30, 2024
Refund Liability 2200 (20 times 110)
Cash 2200
Inventory 1600 (20 times 80)
Estimated Inventory Returns
1600 (20 times 80)
(To record the return of 20 textbooks by Hinton University)
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