None Colt Football Co. had a player contract with Watts that is recordedin its books at $4,800,000 on July 1, 2012. Day Football Co. had aplayer contract with Kurtz that is recorded in its books at$6,000,000 on July 1, 2012. On this date, Colt traded Watts to Dayfor Kurtz and paid a cash difference of $600,000. The fair value ofthe Kurtz contract was $7,200,000 on the exchange date. Theexchange had no commercial substance. After the exchange, theKurtz contract should be recorded in Colt's books atA) $7,200,000.B) $6,000,000.C) $6,600,000.D) $5,400,000.

Step 1: Introduction to the Exchange:Exchange is another method of acquiring a property, plant, and…

Answered: Colt Football Co. had a player contract…

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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Minor Baseball Company had a player contract with Doe that was recorded in its accounting records at $145,000. Better Baseball Company had a player contract with Smith what was recorded in its accounting records at $140,000. Minor traded Doe to Better for Smith by exchanging each player’s contract. The fair value of each contract was $150,000.what amounts should each company show in its accounting records for the exchange of player contacts?
The Williamsport Crosscutters baseball team had a player contract with Clemens (a promising young catcher) that was recorded in its accounting records at $500,000. The Reading Phillies had a player contract with Ruiz (a veteran outfielder) that was recorded in its accounting records at $800,000. The Crosscutters traded Clemens to Reading for Ruiz by exchanging contracts. At the time of the trade, the estimated fair value of each contract was $1,000,000. Both teams were in the midst of pennant races and believed that the trade addressed weaknesses in their respective rosters. Required: Prepare the journal entries to record the player trade for both Williamsport and Reading. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.)
Oriole Company sells goods that cost $290,000 to William Company for $445,000 on January 2, 2023. The sales price includes an installation fee, which is valued at $36,400. The fair value of the goods is $418,600. The goods were delivered on March 1, 2023. Installation is considered a separate performance obligation and was completed on June 18, 2023. Under the terms of the contract, William pays Oriole $265,000 on delivery of the goods and the balance at the completion of the installation. (a) Using the five-step process for revenue recognition, determine when and how much revenue would be recognized by Oriole. Assume IFRS is followed. (Round percentage allocations to 2 decimal places, 15.25% and final answers to O decimal places, e.g. 5,275.) Performance Obligation Deliver goods Installation Total eTextbook and Media List of Accounts Save for Later When? $ tA $ How much? Attempts: 0 of 3 used Submit Answer
On June1, S offered to sell a specific generator set to B for P300,000. B sent a letter for acceptance to S on June 8. On June10, however, S became insolvent. On June 12, S received the letter of acceptance. Was the Contract perfected?
On July 1, 2021, S Furniture, sold to B tables and chairs for a price of P500,000 for the latter's café and restaurant. B will pay 50% upon delivery and the balance will be paid on June 30, 2022. The goods were delivered to B and the 50% down payment was made by B, but the parties stipulated that the ownership over the books does not pass to B, until full payment of the price. The day before June 30, 2022, the restaurant of B was gutted by fire together with the tables and chairs purchased from S. On June 30, 2022, S demanded payment from B. B contends that he is no longer liable for the balance, because ownership was retained by S, thus, following the res perit domino rule, S should bear the risk of loss. Is B correct. Give reason/s.
Morley Manufacturing has notes receivable that have a fair value of P810,000 and a carrying amount of P620,000. Morley decides on December 31, 2021, to use the fair value option for these recently-acquired receivables. Which of the following statements is correct regarding the election of the fair value option by Morley? a. Morley can elect to use the fair value option or amortized cost at each statement of financial position date. b. Morley reports the receivables at fair value, with any unrealized holding gains and losses reported as a separate component of comprehensive income. c. The unrealized holding gain is the difference between the fair value and the carrying amount. d. All of the choices are correct regarding the fair value option.
Sandhill Company sells goods that cost $275,000 to Indigo Company for $440,000 on January 2, 2020. The sales price includes an installation fee, which is valued at $41,400. The fair value of the goods is $408,600. The goods were delivered on March 1, 2020. Installation is considered a separate performance obligation and was completed on June 18, 2020. Under the terms of the contract, Indigo Company pays Sandhill $260,000 upon delivery of the goods and the balance at the completion of the installation.
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On October 10, 2020, Flounder Co. entered into a contract with Belisle Inc. to transfer Flounder’s specialty products (sales value of $9,200, cost of $6,500) on December 15, 2020. Belisle agrees to make a payment of $5,400 upon delivery and signs a promissory note to pay the remaining balance on January 15, 2021. What entries does Flounder make in 2020 on this contract?
On June 30, 2018, Kimberly Farms purchased custom-made harvesting equipment from a local producer. In payment, Kimberly signed a noninterest-bearing note requiring the payment of $60,000 in two years. The fair valueof the equipment is not known, but an 8% interest rate properly reflects the time value of money for this type ofloan agreement. At what amount will Kimberly initially value the equipment? How much interest expense willKimberly recognize in its income statement for this note for the year ended December 31, 2018?
On December 31, 2016, Crispy Cream, Inc. authorized J. Guerrero to operate as a franchisee for an initial franchisee fee of P1,500,000. Of this amount, P600,000 was received upon signing the agreement and the balance, represented by a note, is due in three annual payments, appropriately discounted is P720,000. According to the agreement, the non-refundable down payment represents a fair measure of the services already performed by Crispy Cream however, substantial future services are required of Crispy Cream. Collectability of the note isreasonably certain. On December 31, 2016, what entry should Crispy Cream record for the receipt of the initial franchise fee? a.Cash 600,000Notes Receivable 900,000Unearned interest income 180,000Franchise Revenue 600,000Unearned Franchise fees 720,000 b. Cash 600,000Notes Receivable…
On January 1, 2017, Gordon Co. enters into a contract to sell a customer a wiring base and shelving unit that sits on the base in exchange for $3,000. The contract requires delivery of the base first but states that pay- ment for the base will not be made until the shelving unit is delivered. Gordon identifies two performance obligations and allocates $1,200 of the transaction price to the wiring base and the remainder to the shelving unit. The cost of the wiring base is $700; the shelves have a cost of $320. Instructions (a) Prepare the journal entry on January 1, 2017, for Gordon. (b) Prepare the journal entry on February 5, 2017, for Gordon when the wiring base is delivered to the customer. (c) Prepare the journal entry on February 25, 2017, for Gordon when the shelving unit is delivered to the customer and Gordon receives full payment. URGENT: NEED ANSWER ASAP PLEASE RESPOND WITH COPY AND PASTE, NOT ATTACHMENT USE ORIGINAL CONTENT NOT USED BEFORE ON CHEGG PLEASE ANSWER THROUGHLY TO…

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