CARLA COMPANY MANUFACTURES EQUIPMENT. UNITS SELLING PRICE RANGE FROM 200,000 TO 1,500,000 AND ARE QUOTED INCLUSIVE OF INSTALLATION. WINKERBEAN PURCHASES EQUIPMENT FROM CARLA FOR 1,020,000 AND CONTRACTS CARLA TO INSTALL THE EQUIPMENT. CARLA CHARGES THE SAME PRICE FOR THE EQUIPMENT IRRESPECTIVE OF WEATHER IR DOES THE INSTALLATION OR NOT. USING MARKET DATA CARLA DETERMINED INSTALLATION SERVICE IS ESTIMATED TO HAVE A STANDALONE SELLING PRICE OF 45,000. THE COST OF THE EQUIPMENT IS 560,000. WINKERBEAN IS OBLIGATED TO PAY CARLA 1,020,000 UPON DELIVERY AND INSTALLATION OF THE EQUIPMENT. CARLA DELIVERS THE EQUIPMENT ON 06/1/2020 AND COMPLETES THE INSTALLATION OF THE EQUIPMENT ON 09/30/2020. THE EQUIPMENT HAS A USEFULL LIFE OF 10 YEARS. ASSUME THAT THE EQUIPMENT AND THE INSTALLATION ARE 2 DISTINCT PERFORMANCE OBLIGATIONS WHICH SHOULD BE ACCOUNTED FOR SEPARATELY. prepare the journal entries for Carla for this for this revenue arrangement on June 1,2020 and September 30,2020 assuming Carla receives payment when installation is completed
CARLA COMPANY MANUFACTURES EQUIPMENT. UNITS SELLING PRICE RANGE FROM 200,000 TO 1,500,000 AND ARE QUOTED INCLUSIVE OF INSTALLATION. WINKERBEAN PURCHASES EQUIPMENT FROM CARLA FOR 1,020,000 AND CONTRACTS CARLA TO INSTALL THE EQUIPMENT. CARLA CHARGES THE SAME PRICE FOR THE EQUIPMENT IRRESPECTIVE OF WEATHER IR DOES THE INSTALLATION OR NOT. USING MARKET DATA CARLA DETERMINED INSTALLATION SERVICE IS ESTIMATED TO HAVE A STANDALONE SELLING PRICE OF 45,000. THE COST OF THE EQUIPMENT IS 560,000. WINKERBEAN IS OBLIGATED TO PAY CARLA 1,020,000 UPON DELIVERY AND INSTALLATION OF THE EQUIPMENT. CARLA DELIVERS THE EQUIPMENT ON 06/1/2020 AND COMPLETES THE INSTALLATION OF THE EQUIPMENT ON 09/30/2020. THE EQUIPMENT HAS A USEFULL LIFE OF 10 YEARS. ASSUME THAT THE EQUIPMENT AND THE INSTALLATION ARE 2 DISTINCT PERFORMANCE OBLIGATIONS WHICH SHOULD BE ACCOUNTED FOR SEPARATELY. prepare the journal entries for Carla for this for this revenue arrangement on June 1,2020 and September 30,2020 assuming Carla receives payment when installation is completed
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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CARLA COMPANY MANUFACTURES EQUIPMENT. UNITS SELLING PRICE RANGE FROM 200,000 TO 1,500,000 AND ARE QUOTED INCLUSIVE OF INSTALLATION. WINKERBEAN PURCHASES EQUIPMENT FROM CARLA FOR 1,020,000 AND CONTRACTS CARLA TO INSTALL THE EQUIPMENT. CARLA CHARGES THE SAME PRICE FOR THE EQUIPMENT IRRESPECTIVE OF WEATHER IR DOES THE INSTALLATION OR NOT. USING MARKET DATA CARLA DETERMINED INSTALLATION SERVICE IS ESTIMATED TO HAVE A STANDALONE SELLING PRICE OF 45,000. THE COST OF THE EQUIPMENT IS 560,000. WINKERBEAN IS OBLIGATED TO PAY CARLA 1,020,000 UPON DELIVERY AND INSTALLATION OF THE EQUIPMENT. CARLA DELIVERS THE EQUIPMENT ON 06/1/2020 AND COMPLETES THE INSTALLATION OF THE EQUIPMENT ON 09/30/2020. THE EQUIPMENT HAS A USEFULL LIFE OF 10 YEARS. ASSUME THAT THE EQUIPMENT AND THE INSTALLATION ARE 2 DISTINCT PERFORMANCE OBLIGATIONS WHICH SHOULD BE ACCOUNTED FOR SEPARATELY.
prepare the journal entries for Carla for this for this revenue arrangement on June 1,2020 and September 30,2020 assuming Carla receives payment when installation is completed
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