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.
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.
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?
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
Early in 2020, Kingbird Equipment Company sold 600 Rollomatics at $5,400 each. During 2020, Kingbird spent $21,000 servicing the 2-year assurance warranties that accompany the Rollomatic. All sales transactions are on a cash basis. (a) Prepare 2020 entries for Kingbird. Assume that Kingbird estimates the total cost of servicing the warranties in the second year will be $31,000. (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 Account Titles and Explanation Debit Credit eTextbook and Media
On January 1, 2019, a company sells a piece of equipment for a list price of $260,000. It receives $30,000 and accepts a note receivable for the remainder. The balance due is on December 31, 2021, and the note pays an annual interest of 3% every December 31st. Required: Assuming the customer’s borrowing rate is 5%, prepare all journal entries for 2019 and 2020 under IFRS.
Lowlife Company defaulted on a $250,000 loan that was due on December 31, 2021. The bank has agreed to allow Lowlife to repay the $250,000 by making a series of equal annual payments beginning on December 31, 2022.Required:Calculate the amount at which Barrett should record the note payable and corresponding merchandise purchased on January 1, 2021.1. Calculate the required annual payment if the bank’s interest rate is 10% and four payments are to be made.2. Calculate the required annual payment if the bank’s interest rate is 8% and five payments are to be made.3. If the bank’s interest rate is 10%, how many annual payments of $51,351 would be required to repay the debt?4. If three payments of $104,087 are to be made, what interest rate is the bank charging Lowlife?
Early in 2020, Pina Equipment Company sold 400 Rollomatics at $6,000 each. During 2020, Pina spent $20,000 servicing the 2-year assurance warranties that accompany the Rollomatic. All sales transactions are on a cash basis. A. Prepare 2020 entries for Pina. Assume that Pina estimates the total cost of servicing the warranties in the second year will be $37,000. (If no entry is required, select "No Entry" for the account titles and enter 0 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.) B. Prepare 2020 entries for Pina assuming that the warranties are not an integral part of the sale (a service-type warranty). Assume that of the sales total, $58,000 relates to sales of warranty contracts.Warranty costs incurred in 2020 were $20,000. Estimate revenues to be recognized on a straight-line basis. (If no entry is required, select "No Entry" for the account…
Chung Limited is applying for additional bank overdraft finance to enable the company to make the plant and machinery purchase described below. The directors have has asked you to draw up a cash budget for the 6 months to 30 June 2020 to prove to the bank that that overdraft finance will be repaid by 30 June 2020. The company provides you with the following financial information: Month Sales Purchases Wages Overheads £ £ £ £ November 2019 (actual) 45,800 18,400 9,600 6,000 December 2019 (actual) 34,600 13,900 9,800 14,000 January 2020 (budgeted) 42,200 16,800 10,500 7,000 February 2020 (budgeted) 44,000 17,600 11,200 7,500 March 2020 (budgeted) 54,000 21,600 13,500 18,800 April 2020 (budgeted) 57,600 23,000 14,400 8,000 May 2020 (budgeted) 61,800 24,700 15,300 9,200 June 2020 (budgeted) 63,700 25,500 15,900 9,800 Notes: The bank balance at 1 January 2020…

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