Coronado Industries sells major household appliance service contracts for cash. The service contracts are for a one ycar, two-year, or three-year period. Cash receipts from contracts are credited to unearned service contract revenues. This account had a balance of $965000 at December 31, 2019 before year-end adjustment. Service contract costs are charged as incurred to the service contract expense account, which had a balance of $243000 at December 31, 2019. Outstanding service contracts at December 31, 2019 expire as follows: During 2020 During 2021 During 2022 $198000 $318000 $142000 What amount should be reported as unearned service contract revenues in Coronado's December 31, 2019 balance sheet? $460000. O $658000. O $722000. O $516000.

Coronado Industries sells major household appliance service contracts for cash. The service contracts are for a one ycar, two-year, or three-year period. Cash receipts from contracts are credited to unearned service contract revenues. This account had a balance of $965000 at December 31, 2019 before year-end adjustment. Service contract costs are charged as incurred to the service contract expense account, which had a balance of $243000 at December 31, 2019. Outstanding service contracts at December 31, 2019 expire as follows: During 2020 During 2021 During 2022 $198000 $318000 $142000 What amount should be reported as unearned service contract revenues in Coronado's December 31, 2019 balance sheet? $460000. O $658000. O $722000. O $516000.

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

See similar textbooks

Similar questions

Delta Spirit, Inc. entered into a contract to sell equipment to Wilco, LLC on October 1, 2021. Along with the equipment, Delta Spirit will provide one-year maintenance services on an as-needed basis, beginning once the equipment is installed. Delta Spirit offers similar services to other customers that purchased equipment sold by other vendors for $20,000. Delta Spirit will also provide installation services at no additional cost, a service that Delta Spirit typically charges $10,000. The equipment normally sells for $170,000 on its own. For the package deal, Wilco agrees to pay a total of $180,000. The equipment was delivered and installed on November 1, 2021. Wilco paid the entire invoice in cash on the delivery and installation date. How much revenue should Delta Spirit allocate to the various performance obligations in the above contract (round to the nearest dollar, if needed)?
Waterway Company sells televisions at an average price of $ 934 and also offers to each customer a separate 3-year warranty contract for $ 87 that requires the company to perform periodic services and to replace defective parts. During 2020, the company sold 294 televisions and 214 warranty contracts for cash. It estimates the 3-year warranty costs as $21 for pa and accounts for warranties separately. Assume sales occurred on December 31.2020, and parts and $41 for labor, straight-line recognition of warranty revenues ocurs. Part 1 Record any necessary journal entries in 2020. (f no entry is required, select "No Entry" for the account titles and enter O for the amounts. Credit account tities are automatically indented when amount is entered. Do not indent manually) Account Titles and Explanation Debit Credit eTextbook and Media List of Accounts Save for Later Attempts: 0 of 5 used Submit Answer Part 2 What liability relative to these transactions would appear on the December 31, 2020,…
On January 1, Nathan Company enters into a contract to provide custom-made equipment to Cushing Corporation for $150,000. The contract terms allow cancellation without penalty by either party at any time prior to delivery of the goods. The contract specifies a delivery date of February 15 but the equipment was not delivered until February 28. The contract required full payment within 30 days after delivery. When should revenue be recognized for this contract?
A company delivers goods to the customer for $389,000 on January 2, 2020. The sales price includes an installation fee, which has a standalone selling price of $140,000. The standalone selling price of the goods is $360,000. The installation is considered a separate performance obligation and is expected to take 3 months to complete. How much Unearned Service Revenue will the company record on Jan. 2, 2020? (If the company should not record any Unearned Service Revenue on Jan. 2, 2020, then enter 0.) (Do not round your answer in any part of the computation.)
On May 1, 2025, Sandhill Company enters into a contract to transfer a product to Anthony Company on September 30, 2025. It is agreed that Anthony will pay the full price of $24,560 in advance on June 15, 2025. Anthony pays on June 15, 2025, and Sandhill delivers the product on September 30, 2025. Prepare the journal entries required for Sandhill in 2025. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No entry" for the account titles and enter o for the amounts. List all debit entries before credit entries. Record journal entries in the order presented in the problem.) Date 11 Account Titles and Explanation Debit Credit
Metlock Company sells televisions at an average price of $ 939 and also offers to each customer a separate 3-year warranty contract for $ 87 that requires the company to perform periodic services and to replace defective parts. During 2020, the company sold 321 televisions and 261 warranty contracts for cash. It estimates the 3-year warranty costs as $ 20 for parts and $ 30 for labor, and accounts for warranties separately. Assume sales occurred on December 31, 2020, and straight-line recognition of warranty revenues occurs. (a) Record any necessary journal entries in 2020: (b) What liability relative to these transactions would appear on the December 31, 2020, balance sheet and how would it be classified? In 2019, incurred actual costs relative to 2020 television warranty sales of parts and labor. (c) Record any necessary journal entries in 2020 relative to 2019 television warranties. (d) What amounts relative to the 2019 television warranties would appear on the…
On May 1, 2020, Nash Inc. entered into a contract to deliver one of its specialty mowers to Kickapoo Landscaping Co. The contract requires Kickapoo to pay the contract price of $889 in advance on May 15, 2020. Kickapoo pays Nash on May 15, 2020, and Nash delivers the mower (with cost of $542) on May 31, 2020.(a) Prepare the journal entry on May 1, 2020, for Nash. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No entry" for the account titles and enter 0 for the amounts.) (b) Prepare the journal entry on May 15, 2020, for Nash. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No entry" for the account titles and enter 0 for the amounts.) (c) Prepare the journal entry on May 31, 2020, for Nash. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is…
On November 1, 2024, Wildhorse Farm entered into a contract to buy a $159000 harvester from John Deere. The contract required Wildhorse Farm to pay $159000 in advance on November 1, 2024. The harvester (cost of $119000) was delivered to Wildhorse Farm on November 30, 2024. The journal entry for John Deere to record the contract on November 1, 2024 includes a credit to Accounts Receivable for $159000. debit to Unearned Sales Revenue for $159000. credit to Sales Revenue for $159000. O credit to Unearned Sales Revenue for $159000.
On January 1, SaLow Company enters into a contract to provide custom-made equipment to ByHi Corporation for $100,000. The contract terms allow cancellation without penalty by either party at any time prior to delivery of the goods. The contract specifies a delivery date of March 15 but the equipment was not delivered until April 10. The contract required full payment within 30 days after delivery. When should revenue be recognized for this contract?
On January 1, 2017, Purdy Company enters into a contract to transfer Blue and Rain to Georgia Co. for $300,000. The contract specifies that payment for Blue will not occur until Rain is also delivered. In other words, payment will not occur until both Blue and Rain are transferred to Georgia. Purdy determines that standalone prices are $110,000 for Blue and $190,000 for Rain. Purdy delivers Blue to Georgia on February 10, 2017. On March 15, 2017, Purdy delivers Rain to Georgia. Purdy should record
Belk Co. sells extended service contracts on automobiles for cash. The service contracts are for a one-year, two-year, or three-year period. Cash receipts from customers are credited to Unearned Service Contract Revenue and this account had a balance of $450,000 at Dec. 31, 20A1 before year-end adjustment. Service contract costs are charged as incurred to the Service Contract Expense account, which had a balance of $100,000 at Dec. 31, 20A1. Outstanding service contracts at Dec. 31, 20A1 expire as follows:During 20A2: $90,000During 20A3: $160,000During 20A4: $70,000What amount should be reported as Unearned Service Contract Revenue in Belk's Dec. 31, 20A1 balance sheet? Group of answer choices $ 0 $220,000 $320,000 $130,000
Capricorn Company must determine the December 31, 2019 year-end accruals for advertising and rent expenses. A P2,000 advertising bill was received January 6, 2020. It related to costs of P1,500 for advertisements in December 2019 issues and P500 for advertisements in January 2, 2020 issues of the newspaper. A store lease, effective December 15, 2018, calls for fixed rent of P4,800 per month payable 1 month from the effective date and monthly thereafter. In addition, rent equal to 5% of net sales over P1,200,000 per calendar year is payable on January 31 of the following year. Net sales for 2019 were P2,200,000. In its December 31, 2019 statement of financial position, Capricorn should report accrued liabilities of: P51,500 P53,900 P56,800 P56,300