According to the revenue recognition principle, revenues should be recognized when or as the company performs acts promised the customer. For many businesses, this condition is met at the point of delivery of goods or services. The following transactions occurred in September: Required: For each of the transactions, if revenue is to be recognized in September, indicate the amount. Activity a. A customer paid for and downloaded song files from Apple's iTunes store for $11 cash. Answer from Apple's standpoint. b. Best Flooring provided a carpet installation for $2,200 cash. A comparable installation from other companies costs $3,200. c. Span Cable is scheduled to install digital cable at 2,250 Austin area homes next week. The installation charge is $190 per home. The terms require payment within 30 days of installation. Answer from Span Cable's standpoint. d. Span Cable completed the installations described in (c). Answer from Span Cable's standpoint. e. Span Cable received payment from customers for the installations described in (c). Answer from Span Cable's standpoint. f. A customer purchased a ticket from QuickAir in September for $570 cash to travel in December. Answer from QuickAir's standpoint. Amount

According to the revenue recognition principle, revenues should be recognized when or as the company performs acts promised the customer. For many businesses, this condition is met at the point of delivery of goods or services. The following transactions occurred in September: Required: For each of the transactions, if revenue is to be recognized in September, indicate the amount. Activity a. A customer paid for and downloaded song files from Apple's iTunes store for $11 cash. Answer from Apple's standpoint. b. Best Flooring provided a carpet installation for $2,200 cash. A comparable installation from other companies costs $3,200. c. Span Cable is scheduled to install digital cable at 2,250 Austin area homes next week. The installation charge is $190 per home. The terms require payment within 30 days of installation. Answer from Span Cable's standpoint. d. Span Cable completed the installations described in (c). Answer from Span Cable's standpoint. e. Span Cable received payment from customers for the installations described in (c). Answer from Span Cable's standpoint. f. A customer purchased a ticket from QuickAir in September for $570 cash to travel in December. Answer from QuickAir's standpoint. Amount

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Blue, Inc., sells playground equipment to schools and municipalities. It mails invoices at the end of each month for all goods shipped during that month; credit terms are net 30 days. Sales and accounts receivable data for 2017, 2018, and 2019 follow: Years Ending December 31, 2017: Sales: $1,785,980 Accounts Receivable at year-end: $220,189 2018: Sales: $1,839,559 Accounts Receivable at year-end: $227,896 2019: Sales: $1,986,724 Accounts Receivable at year-end: $267,094 Required: 1. Calculate the rates of increase in sales and in receviables during 2018 and 2019. 2. Do your calculations indicate any potential problems with Blue's receivables? 3. If so, suggest a possible explanation for your findings and indicate what action, if any, would then be needed to bring Blue's financial statements into conformity with GAAP.
Consider the following situations: 1. American Airlines collects cash on June 12 from the sale of a ticket to a customer. The flight occurs on August 16. 2. A customer purchases sunglasses from Eddie Bauer on January 27 on account. Eddie Bauer receives payment from the customer on February 2. 3. On March 30, a customer preorders 10 supreme pizzas (without onions) from Pizza Hut for a birthday party. The pizzas are prepared and delivered on April 2. The company receives cash at the time of delivery. 4. A customer pays in advance for a three-month subscription to Sports Illustrated on July 1. Issues are scheduled for delivery each week from July 1 through September 30. Required: For each situation, determine the date for which the company recognizes the revenue under accrual-basis accounting.
The following events occurred for Palette Painters, Inc: September 18 Purchased paint on account. October 7 A customer signed a contract to have her house painted. October 24 Palette Painters paid for the paint purchased on account on September 18th. October 30 The customer paid Palette Painters for the work contracted for on October 7. November 5 Palette Painters painted the customer’s house. According to the Revenue Recognition and Matching Principles, Palette Painters, Inc. should record Group of answer choices A. the revenue in November and the expense in September. B. The revenue and expenses in October. C. The revenue in October and the expenses in September. D. The revenue and expenses in November.
In December, Northern Kiteboarding magazine collected $80,000 for subscriptions for the next calendar year. The company collects cash in advance and then downloads the magazines to subscribers each month Apply the recognition criteria for revenues to determine (a) when the company should record revenue for this situation and (b) the amount of revenue the company should record for the January through March downloads a Northern Kiteboarding should record revenue after b. The amount of revenue equals nof when
Music Flow is a streaming music service specializing in podcasts. Music Flow generates revenue through subscriptions that requires customers to pay using a credit card. Consider the following events for Music Flow in Year 1: Music Flow earned $528,000 of subscription revenue during Year 1. Music Flow submitted the credit card receipts to the credit card company immediately. The credit card company paid Music Flow cash in the amount of face value less a 4 percent service charge. Required: Use a horizontal financial statements model to show how each event affects the balance sheet, income statement, and statement of cash flows. More specifically, record the amounts of the events into the model. Also, in the Statement of Cash Flows Note:- Do not provide handwritten solution. Maintain accuracy and quality in your answer. Take care of plagiarism. Answer completely. You will get up vote for sure.
Movie Madness sells subscriptions for $144 for 36 months. The company collects cash in advance and then subscribers have access to unlimited movies each month. Apply the revenue recognition principle to determine a. when Movie Madness should record revenue for this situation. b. the amount of revenue Movie Madness should record for two months. a. Movie Madness should record revenue when v the customer. b. For two months, Movie Madness should record revenue of
Ainsley Emporium sells gift cards to customers. In December, customers purchased $10,000 of gift cards. During December, the gift card recipients used gift cards to purchase $3,000 of goods. Prepare Ainsley’s entry for (1) the sale of the gift cards and (2) the year-end adjusting entry. (Credit account titles are automatically indented when the amount is entered. Do not indent manually.) Account Titles and Explanation Debit Credit (To record cash received for goods to be provided at a later date) (To record the sale of merchandise using a gift card)
Many businesses borrow money during periods of increased business activity to finance inventory and accounts receivable. For example, Mitt builds up its inventory to meet the needs of retailers selling to Christmas shoppers. A large portion of Mitt's sales are on credit. As a result, Mitt often collects cash from its sales several months after Christmas. Assume on November 1, 2018, Mitt borrowed $6.5 million cash from Metropolitan Bank and signed a promissory note that matures in six months. The interest rate was 6.00 percent payable at maturity. The accounting period ends December 31. how would i make the three journal entires for the statement above
A small retailer allows customers to use two different credit cards in charging purchases. The CC Bank Card assesses a 4.6% service charge for credit card sales. The VIZA Card assesses a 3.8% charge on sales for using its card. This retailer also has its own store credit card. As of Feb 28 month-end, the retailer earned $65 in net interest revenue on its own card. Prepare journal entries to record the following selected credit card transactions. Feb. 2 Sold merchandise for $3,000 (that had cost $1800) and accepted the customer’s CC Bank Card. Feb. 6 Sold merchandise for $2200 (that had cost $1500) and accepted the customer’s VIZA Card. Feb 28 Recognized the $65 interest revenue earned on its store credit card for January.
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can someone help me with journal entry with the following entries? Prepare journal entries for the following: Beginning Balance in Accounts Receivable: 12,000 Beginning Balance in Allowance: credit of 1,000 On March 31, customers were billed $25,000. On June 15, cash collections from transaction (a) totaled $20,000. On 10/31, a customer balance of $1500 from a prior year was written off. On 12/15, a customer paid an old balance of $900 that had been written off in a previous year. On 12/31, bad debts were estimated at 2% of credit sales.
Zane Enterprises accepts a credit card as payment for $1,000 of services provided to a customer. The credit card company charges a 4% handling charge for its collection services. Based on this information Multiple Choice Zane will pay the credit card company $1,000 cash. Zane will collect $1,000 cash from the credit card company. Zane will pay the credit card company $960 cash. Zane will collect $960 cash from the credit card company.