E 6-5 Performance obligations LO6-2,LO6-4,LO6-5 On March 1, 2024, Gold Examiner receives $147,000 from a local bank and promises to deliver 100 units of certified 1-oz. gold bars on a future date. The contract states that ownership passes to the bank when Gold Examiner delivers the products to Brink's, a third-party carrier. In addition, Gold Examiner has agreed to provide a replacement shipment at no additional cost if the product is lost in transit. The stand-alone price of a gold bar is $1,440 per unit, and Gold Examiner estimates the stand-alone price of the replacement insurance service to be $60 per unit. Brink's picked up the gold bars from Gold Examiner on March 30, and delivery to the bank occurred on Apri 1. Required: 1. How many performance obligations are in this contract? 2. Prepare the journal entry Gold Examiner would record on March 1. 3. Prepare the journal entry Gold Examiner would record on March 30. 4. Prepare the journal entry Gold Examiner would record on April 1.

E 6-5 Performance obligations LO6-2,LO6-4,LO6-5 On March 1, 2024, Gold Examiner receives $147,000 from a local bank and promises to deliver 100 units of certified 1-oz. gold bars on a future date. The contract states that ownership passes to the bank when Gold Examiner delivers the products to Brink's, a third-party carrier. In addition, Gold Examiner has agreed to provide a replacement shipment at no additional cost if the product is lost in transit. The stand-alone price of a gold bar is $1,440 per unit, and Gold Examiner estimates the stand-alone price of the replacement insurance service to be $60 per unit. Brink's picked up the gold bars from Gold Examiner on March 30, and delivery to the bank occurred on Apri 1. Required: 1. How many performance obligations are in this contract? 2. Prepare the journal entry Gold Examiner would record on March 1. 3. Prepare the journal entry Gold Examiner would record on March 30. 4. Prepare the journal entry Gold Examiner would record on April 1.

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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Current Attempt in Progress Carla Vista Co. enters into a contract to sell Product A and Product B on January 2, 2023, for an upfront cash payment of $170,000. Product A will be delivered in two years (January 2, 2025) and Product B will be delivered in five years (January 2, 2028). Carla Vista allocates the $170,000 to Products A and B on a relative stand-alone selling price basis as follows. Stand-Alone Selling Prices Percentage Allocated Allocated Amounts Product A $36,000 20% $34,000 Product B 144,000 80% 136,000 $180,000 $170,000 Carla Vista uses an interest rate of 5%, which is its incremental borrowing rate.
4b The company ΨΗΦΙΔΑ Α.Ε. produces electronic components used in the manufacture of mixers. The company provides a one-year warranty for good operation. In the event that any of the components show a defect, ΨΗΦΙΔΑ Α.Ε. undertakes to replace it at no cost to the purchaser. On 31/12/20X2, based on data from previous years, 2% of the sold components are expected to be replaced in the following year as defective, with an estimated cost of €24,000. Based on the company’s accounting records on 31/12/20X2, the warranty cost amounted to €4,000.Required: Record the relevant accounting journal entries
Problem 5-9 (Algo) Noninterest-bearing note; annuity and lump-sum payment [LO5-3, 5-8] On January 1, 2024, The Barrel Company purchased merchandise from a supplier. Payment was a noninterest-bearing note requiring five annual payments of $35,000 on each December 31 beginning on December 31, 2024, and a lump-sum payment of $250,000 on December 31, 2028. A 12% interest rate properly reflects the time value of money in this situation. Required: Calculate the amount at which Barrel should record the note payable and corresponding merchandise purchased on January 1, 2024. Note: Round your final answers to nearest whole dollar amount. Use tables, Excel, or a financial calculator. (FV of $1, PV of $1, FVA of $1, PVA of $1, FVAD of $1 and PVAD of $1) Time values are based on: n = Cash Flow i= Amount Present Value Payments Lump Sum Amount recorded
Current Attempt in Progress Wildhorse Inc, manufactures and sells computers that include an assurance-type warranty for 90 days. Wildhorse offers an optional extended coverage plan under which it will repair or replace any defective part for three years from the expiration of the assurance- type warranty. Because the optional extended coverage plan is sold separately, Wildhorse determines that the three years of the extended coverage represent a separate performance obligation. The total transaction price for the sale of a computer and the extended warranty is $3,420 on October 1, 2023. Wildhorse determines that the stand-alone selling price of each is $3,220 and $200. respectively. Further, Wildhorse estimates, based on historical experience, that it will incur $230 in costs to repair defects that arise within the 90-day coverage period for the assurance-type warranty. The cost of the equipment is $1,400 (b) Prepare the journal entry (or entries) to record the cash sale of the…
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Problem 14
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