Don't use Ai Assume the following scenarios.Scenario 1: During 2021, IBM provides consulting services on its mainframe computer for $10,700 on account. The customerdoes not pay for those services until 2022.Scenario 2: On January 1, 2021, Gold's Gym sells a one-year membership for $1,256 cash. Normally, this type ofmembership would cost $1,570, but the company is offering a 20% "New Year's Resolution" discount.Scenario 3: During 2021, The Manitowoc Company provides shipbuilding services to the U.S. Navy for $405,000. The U.S.Navy will pay $135,000 at the end of each year for the next three years, beginning in 2021.Scenario 4: During 2021, Goodyear sells tires to customers on account for $31,700. By the end of the year, collections total$27,000. At the end of 2022, it becomes apparent that the remaining $4,700 will never be collected from customers.Required:For each scenario, calculate the amount of revenue to be recognized in 2021.Scenario 1Scenario 2Scenario 3Scenario 4Revenue recognized in2021

Reference: Tuovila, A. (2024, June 17). Revenue Recognition: What it means in Accounting and the 5…

Answered: Assume the following scenarios.…

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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Assume the following scenarios. Scenario 1: During 2021, IBM provides consulting services on its mainframe computer for $10,400 on account. The customer does not pay for those services until 2022. Scenario 2: On January 1, 2021, Gold's Gym sells a one-year membership for $1,155 cash. Normally, this type of membership would cost $1,540, but the company is offering a 25% “New Year's Resolution" discount. Scenario 3: During 2021, The Manitowoc Company provides shipbuilding services to the U.S. Navy for $360,000. The U.S. Navy will pay $120,000 at the end of each year for the next three years, beginning in 2021. Scenario 4: During 2021, Goodyear sells tires to customers on account for $28,400. By the end of the year, collections total $24,000. At the end of 2022, it becomes apparent that the remaining $4,400 will never be collected from customers. Required: For each scenario, calculate the amount of revenue to be recognized in 2021. Revenue recognized in 2021 Scenario 1 Scenario 2 Scenario…
Assume the following scenarios.Scenario 1: During 2021, IBM provides consulting services on its mainframe computer for $11,000 on account. The customer does not pay for those services until 2022.Scenario 2: On January 1, 2021, Gold’s Gym sells a one-year membership for $1,200 cash. Normally, this type of membership would cost $1,600, but the company is offering a 25% “New Year’s Resolution” discount.Scenario 3: During 2021, The Manitowoc Company provides shipbuilding services to the U.S. Navy for $450,000. The U.S. Navy will pay $150,000 at the end of each year for the next three years, beginning in 2021.Scenario 4: During 2021, Goodyear sells tires to customers on account for $35,000. By the end of the year, collections total $30,000. At the end of 2022, it becomes apparent that the remaining $5,000 will never be collected from customers.Required:For each scenario, calculate the amount of revenue to be recognized in 2021.
On April 1, 2021, Shoemaker Corporation realizes that one of its main suppliers is having difficulty meeting delivery schedules, which is hurting Shoemaker’s business. The supplier explains that it has a temporary lack of funds that is slowing its production cycle. Shoemaker agrees to lend $600,000 to its supplier using a 12-month, 11% note. Required: Record the following transactions for Shoemaker Corporation. 1. The loan of $600,000 and acceptance of the note receivable on April 1, 2021. 2. The adjustment for accrued interest on December 31, 2021. 3. Cash collection of the note and interest on April 1, 2022.
Assume the following scenarios.Scenario 1: During 2021, The Hubbard Group provides services of $900,000 for repair of a state highway. The company receives an initial payment of $300,000 with the balance to be received the following year.Scenario 2: Rolling Stone magazine typically charges $80 for a one-year subscription. On January 1, 2021, Herman, age 72, purchases a one-year subscription to the magazine and receives a 15% senior citizen discount.Scenario 3: During 2021, Waste Management provides services on account for $30,000. The customer pays for those services in 2022.Scenario 4: During 2021, Sysco Corporation sells grocery items to one of its customers for $260,000 on account. Cash collections on those sales are $180,000 in 2021 and $60,000 in 2022. The remaining $20,000 is written off as uncollectible in 2022.Required: For each scenario, calculate the amount of revenue to be recognized in 2021.
On May 1, 2020, People's Networks sold computer networking supplies to Florida Autos for $46,300. The cost of the supplies is $20,835. Instead of paying immediately, Florida Autos signed a note receivable with 10% annual interest, payable in eight months with the principle amount. People's Networks has a year end of October 31. Do not enter dollar signs or commas in the input boxes. Round all answers to the nearest whole number. For transaction with two debits or credits, enter the debit accounts in alphabetical order followed by the credit accounts in alphabetical order. a) Record the journal entry when the sale is made; assume People's Networks uses the perpetual inventory system. Date Account Title and Explanation Debit Credit May 1 To record sales for notes receivable May 1 To record cost of goods sold b) Prepare journal entries for the year end adjustment on October 31, 2020. Date Account Title and Explanation Debit Credit Oct 31 To record accrued interest revenue c) Prepare…
Instructions Escargot Inc. is a 5-star restaurant in Cincinnati. The restaurant sells 500 gift cards during January 2019. Each gift card has a face value of $300. The gift cards never expire, although based on industry experience, Escargot expects that 12% of the balances will never be redeemed. During February 2019, $45,000 of gift cards are redeemed, and in March 2019 another $80,000 is redeemed. Required: 1. Prepare journal entries for Escargot's gift card transactions for January through March. 2. Assume that at the end of April, due to the popularity of the restaurant, Escargot reduces its estimate of the amount of gift cards that will go unused to 8%. During April, gift cârds worth $10,000 are used. Prepare any necessary journal entries.
Use the information for the next three (3) questions. Seva Company operates a customer loyalty program. The entity grants program members loyalty points when they spend a specified amount on purchases. Program members can redeem the points for further purchases. The points have no expiry date.During 2020, the customer earned 60,000 points. Management expects that 100% of these points will be redeemed. The stand-alone selling price of each loyalty point is estimated at P20. The sales during 2020 amounted to P6,800,000 based on stand-alone selling price.On December 31, 2020, 28,800 points have been redeemed in exchange for purchases.In 2021, the management revised expectations and now expects 90% of the points to be redeemed. 9,000 points were redeemed during the year.How much of the sales should be allocated to the award points? How much should be recognized as revenue for 2020? How much should be recognized as revenue for 2021?
Max Corp. sold goods for $36,000 on July 17, 2020, and accepted a 12%, 90-day note. On August 1, the note was sold to a bank at a 15% discount rate. Required: a. Compute the proceeds. Assume a 360-day year. b. If the maker dishonored the note at maturity, prepare the entry for Max Corp. assuming $75 of bank protest fees. If an amount box does not require an entry, leave it blank.
Max Corp. sold goods for $36,000 on July 17, 2020, and accepted a 12%, 90-day note. On August 1, the note was sold to a bank at a 15% discount rate. Required: a. Compute the proceeds. Assume a 360-day year. $ b. If the maker dishonored the note at maturity, prepare the entry for Max Corp. assuming $75 of bank protest fees. If an amount box does not require an entry, leave it blank.
On April 1, 2024, Macomb Corporation realizes that one of its main suppliers is having difficulty meeting delivery schedules, which is hurting Macomb's business. The supplier explains that it has a temporary lack of funds that is slowing its production cycle. Macomb agrees to lend $470,000 to its supplier using a 12-month, 11% note. Required: Record the following transactions for Macomb Corporation: 1. The loan of $470,000 and acceptance of the note receivable on April 1, 2024. 2. The adjusting entry for accrued interest on December 31, 2024. 3. Cash collection of the note and interest on April 1, 2025.
Zahava Corporation sells equipment to Ari Company for $700,000. Ari does not need the equipment until December 31, 2021, but agrees to pay $600,000 immediately on December 31, 2019, in order to assist Zahava with finances. The remaining $100,000 is due upon delivery on December 31, 2021. Zahava typically can borrow at 5%. 1. Prepare the journal entry Zahava makes to record the receipt of $600,000 on December 31, 2019. 2. Prepare the jornal entry, if any, Zahava makes in 2020. 3. Prepare the journal entry Zahava makes to record delivery of the goods and collection of the remaining $100,000 on December 31, 2021.
Early in 2020, Carla Equipment Company sold 500 Rollomatics at $6,100 each. During 2020, Carla spent $22,000 servicing the 2-year assurance warranties that accompany the Rollomatic. All sales transactions are on a cash basis. Prepare 2020 entries for Carla. Assume that Carla estimates the total cost of servicing the warranties in the second year will be $30,000. (If no entry is required, select "No Entry" for the account titles and enter O for the amounts. Credit account titles are automatically indented when amount is entered. Do not indent manually. Record journal entries in the order presented in the problem.) Date 10 Account Titles and Explanation Debit Credit

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