Geraths Windows manufactures and sells custom storm windows for three-season porches. Geraths also provides installation service for the windows. The installation process does not involve changes in the windows, so this service can be performed by other vendors. Geraths enters into the following contract on July 1, 2014, with a local homeowner. The customer purchases windows for a price of $1,930 and chooses Geraths to do the installation. Geraths charges the same price for the windows irrespective of whether it does the installation or not. The price of the installation service is estimated to have a fair value of $630. The customer pays Geraths $1,500 (which equals the fair value of the windows, which have a cost of $1,000) upon delivery and the remaining balance upon installation of the windows. The windows are delivered on September 1, 2014, Geraths completes installation on October 15, 2014, and the customer pays the balance due. Prepare the journal entries for Geraths in 2014.

Geraths Windows manufactures and sells custom storm windows for three-season porches. Geraths also provides installation service for the windows. The installation process does not involve changes in the windows, so this service can be performed by other vendors. Geraths enters into the following contract on July 1, 2014, with a local homeowner. The customer purchases windows for a price of $1,930 and chooses Geraths to do the installation. Geraths charges the same price for the windows irrespective of whether it does the installation or not. The price of the installation service is estimated to have a fair value of $630. The customer pays Geraths $1,500 (which equals the fair value of the windows, which have a cost of $1,000) upon delivery and the remaining balance upon installation of the windows. The windows are delivered on September 1, 2014, Geraths completes installation on October 15, 2014, and the customer pays the balance due. Prepare the journal entries for Geraths in 2014.

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

Sisters Company specializes in selling and installing upscale home theater systems. On April 1, 2021, Sisters sold a premium home theater package that includes a projector, set of surround speakers, and high quality leather seats, along with complete installation service, for $32,500. If sold separately, each of these goods or services would have cost $15,000 (projector), $12,500 (speakers), $17,500 (seats), and $3,000 (installation), respectively. Required: How much of the transaction price would be allocated to the projector, the speakers, the leather seats, and the installation service, assuming that each of these four parts of the contract is a separate performance obligation? Show your work.
Prepare the journal entries for Sunland in 2017. Sunland Windows manufactures and sells custom storm windows for three-season porches. Sunland also provides installation service for the windows. The installation process does not involve changes in the windows, so this service can be performed by other vendors. Sunland enters into the following contract on July 1, 2017, with a local homeowner. The customer purchases windows for a price of $2,490 and chooses Sunland to do the installation. Sunland charges the same price for the windows irrespective of whether it does the installation or not. The installation service is estimated to have a standalone selling price of $590. The customer pays Sunland $1,950 (which equals the standalone selling price of the windows, which have a cost of $1,110) upon delivery and the remaining balance upon installation of the windows. The windows are delivered on September 1, 2017, Sunland completes installation on October 15, 2017, and the customer pays the…
Free Wheels has a plant that assembles bicycles. The plant currently has a small cafeteria for the workers but the kitchen equipment is in need of a substantial overhaul. Free Wheels has been offered a contract by Beasteats to supply food to the workers. The particulars of the situation are shown in the table. Should Free Wheels continue with the in-house food services or contract the services to Beasteats? (Hint: Create a table with the columns for year (for 0-8 years), In-house current cost, contract current cost, in-house PW, and contract PW). Food Service: In-House Versus Contract Food service labour (hours/year) Wage rate (real, time 1, $/hour) Overhead cost (real, time 1, S/year) Kitchen equipment first cost (current, time 0, S) Contract cost, years 1 to 3 (current S) Contract cost, years 4 to 6 (current S) Current dollar MARR Expected annual inflation rate Study period (years) 6000 15 18 000 25 000 55 000 63 700 22% 5% 6
Blue Windows manufactures and sells custom storm windows for three-season porches. Blue also provides installation service for the windows. The installation process does not involve changes in the windows, so this service can be performed by other vendors. Blue enters into the following contract on July 1, 2020, with a local homeowner. The customer purchases windows for a price of $2,420 and chooses Blue to do the installation. Blue charges the same price for the windows irrespective of whether it does the installation or not. The customer pays Blue $1,920 (which equals the standalone selling price of the windows, which have a cost of $1,100) upon delivery and the remaining balance upon installation of the windows. The windows are delivered on September 1, 2020, Blue completes installation on October 15, 2020, and the customer pays the balance due. 1) Blue estimates the standalone selling price of the installation based on an estimated cost of $440 plus a margin of 20% on cost.Prepare…
Johnny Lopez Construction Company is a general contractor that specializes in custom residential housing. Each job requires a bid that includes Lopez's direct costs and subcontractor costs as well as an amount referred to as "overhead and profit." Lopez's bidding policy is to estimate the costs of direct materials, direct labor, and subcontractors'costs. These are totaled, and a markup is applied to cover overhead and profit. In the coming year, the company believes it will be the successful bidder on 10 jobs with the following total revenues and costs: Revenue P8,740,000 Direct materials P2,250,000 1,900,000 3,450,000 Direct labor Subcontractors 7,600,000 PL140.000 Overhead and profit Required: 1. Given the preceding information, what is the markup percentage on total direct costs? 2. Suppose Lopez is asked to bid on a job with estimated direct costs of P 750,000. What is the bid? If the customer complains that the profit seems pretty high, how might Lopez counter that accusation?
Video Planet (VP) sells a big screen TV package consisting of a 60-inch plasma TV, a universal remote, and on-site installation by VP staff. The installation includes programming the remote to have the TV interface with other parts of the customer’s home entertainment system. VP concludes that the TV, remote, and installation service are separate performance obligations. VP sells the 60-inch TV separately for $1,500, sells the remote separately for $200, and offers the installation service separately for $300. The entire package sells for $1,900. Required: How much revenue would be allocated to the TV, the remote, and the installation service? Note: Do not round intermediate calculations.
Note:- Do not provide handwritten solution. Maintain accuracy and quality in your answer. Take care of plagiarism. Answer completely. You will get up vote for sure.
Video Planet (VP) sells a big screen TV package consisting of a 60-inch plasma TV, a universal remote, and on-site installation by VP staff. The installation includes programming the remote to have the TV interface with other parts of the customer’s home entertainment system. VP concludes that the TV, remote, and installation service are separate performance obligations. VP sells the 60-inch TV separately for $1,750 and sells the remote separately for $100, and offers the entire package for $1,900. VP does not sell the installation service separately. VP is aware that other similar vendors charge $150 for the installation service. VP also estimates that it incurs approximately $100 of compensation and other costs for VP staff to provide the installation service. VP typically charges 40% above cost on similar sales. Required: 1. to 3. Calculate the stand-alone selling price of the installation service using each of the following approaches. 1. Adjusted Market Approach 2. Expected Cost…
Printer Supply Company sells computer printers and printer supplies. One of its products is a toner cartridge for laser printers. At the beginning of 2019, there were 225 cartridges on hand that cost $62 each. During 2019, Printer Supply purchased 1,475 cartridges at $62 each. After inspection, Printer Supply determined that 15 cartridges were defective and returned them to the supplier. Printer Supply also sold 830 cartridges at $95 each and sold an additional 710 cartridges at $102 each after a midyear selling price increase. Customers returned 20 of the cartridges that were purchased at $102 to Printer Supply for miscellaneous reasons. Assume that Printer Supply uses a perpetual inventory system. . Prepare summary journal entries to record the purchases, sales, and return of inventory. Assume that all purchases and sales are on credit but no discounts were offered. Record the entry for the cost of goods sold related to the sales during the year. Cost of Goods Sold ?…
Imperial Jewelers manufactures and sells a gold bracelet for $401.00. The company's accounting system says that the unit product cost for this bracelet is $267.00 as shown below: Direct materials Direct labor Manufacturing overhead Unit product cost The members of a wedding party have approached Imperial Jewelers about buying 20 of these gold bracelets for the discounted price of $361.00 each. The members of the wedding party would like special filigree applied to the bracelets that would increase the direct materials cost per bracelet by $5. Imperial Jewelers would also have to buy a special tool for $469 to apply the filigree to the bracelets. The special tool would have no other use once the special order is completed. $ 150 84 33 $ 267 To analyze this special order opportunity, Imperial Jewelers has determined that most of its manufacturing overhead is fixed and unaffected by variations in how much jewelry is produced in any given period. However, $6.00 of the overhead is variable…
Coby is plumber who engages Peter to buy materials on his behalf. Peter is given a limit of $1,500 on purchases that he makes on Coby’s behalf. U-Bend Pty Ltd is a wholesaler of PVC piping from whom Peter has purchased pipes before . The company was selling piping at a discount price. Peter purchase a quantity of this piping for $2,000 and arranged for delivery. Peter thought it was too good a deal to pass up, even though it was in excess of his limit of $1,500 . Coby is refusing to accept the delivery of the pipes from U- Bend Pty Ltd Under Agency Law, will Coby be bound by the purchase?
what is pooling of Interest Method?