Answered: As a result of the purchase, by how…

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As a result of the purchase, by how much will Pina Colada Corp. increase its van account?

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 15RE: GameDay sells recreational vehicles along with secure parking storage to customers. Game Day sells...

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Question

Pina Colada Corp. purchased a delivery van with a $55000 list price. The company was given a $4200 cash discount by the dealer and paid $3100 sales tax. Annual insurance on the van is $1200. As a result of the purchase, by how much will Pina Colada Corp. increase its van account?

$53800.

$55000.

$50800.

$53900.

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The list price of a secondhand van was P300,000 at a local car dealership. However, a customer convinced the dealer to sell the van for P250,000 (the van had cost the dealer P200,000). The amount of revenue that would be recognized as a result of the sale is: