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Hospital Equipment Company (HEC) acquired several fMRI machines HEC usually sells these machines to hospitals at a price of $7,120. HE repair services for fMRI machines for $1,780. HEC is paid $7,120 cash

Hospital Equipment Company (HEC) acquired several fMRI machines HEC usually sells these machines to hospitals at a price of $7,120. HE repair services for fMRI machines for $1,780. HEC is paid $7,120 cash

FINANCIAL ACCOUNTING
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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Required information [The following information applies to the questions displayed below.] Hospital Equipment Company (HEC) acquired several fMRI machines for its inventory at a cost of $3,800 per machine. HEC usually sells these machines to hospitals at a price of $7,120. HEC also separately sells 12 months of training and repair services for fMRI machines for $1,780. HEC is paid $7,120 cash on November 30 for the sale of an fMRI machine delivered on December 1. HEC sold the machine at its regular price, but included one year of free training and repair service. 2. Prepare journal entries would HEC record on November 30 and December 1? (Assume HEC uses a perpetual inventory system for recording the cost of goods sold.) (If no entry is required for a transaction/event, select "No Journal Entry Required" in the first account field.) View transaction list 1 Record the receipt of cash. 2 Record the sales revenue for the equipment (MRI machine). 3 Record the cost of goods sold. Note : journal entry has been entered Record entry Clear entry IXI t Credit View general journal >
Transcribed Image Text:Required information [The following information applies to the questions displayed below.] Hospital Equipment Company (HEC) acquired several fMRI machines for its inventory at a cost of $3,800 per machine. HEC usually sells these machines to hospitals at a price of $7,120. HEC also separately sells 12 months of training and repair services for fMRI machines for $1,780. HEC is paid $7,120 cash on November 30 for the sale of an fMRI machine delivered on December 1. HEC sold the machine at its regular price, but included one year of free training and repair service. 2. Prepare journal entries would HEC record on November 30 and December 1? (Assume HEC uses a perpetual inventory system for recording the cost of goods sold.) (If no entry is required for a transaction/event, select "No Journal Entry Required" in the first account field.) View transaction list 1 Record the receipt of cash. 2 Record the sales revenue for the equipment (MRI machine). 3 Record the cost of goods sold. Note : journal entry has been entered Record entry Clear entry IXI t Credit View general journal >
Required information [The following information applies to the questions displayed below.] Hospital Equipment Company (HEC) acquired several fMRI machines for its inventory at a cost of $3,800 per machine. HEC usually sells these machines to hospitals at a price of $7,120. HEC also separately sells 12 months of training and repair services for fMRI machines for $1,780. HEC is paid $7,120 cash on November 30 for the sale of an fMRI machine delivered on December 1. HEC sold the machine at its regular price, but included one year of free training and repair service. Required: 1. For the machine sold at its regular price, but with one year of "free" training and repair service, determine the dollar amount of revenue earned from the equipment sale versus the revenue earned from the training and repair services. Equipment Service Allocated Transaction Price
Transcribed Image Text:Required information [The following information applies to the questions displayed below.] Hospital Equipment Company (HEC) acquired several fMRI machines for its inventory at a cost of $3,800 per machine. HEC usually sells these machines to hospitals at a price of $7,120. HEC also separately sells 12 months of training and repair services for fMRI machines for $1,780. HEC is paid $7,120 cash on November 30 for the sale of an fMRI machine delivered on December 1. HEC sold the machine at its regular price, but included one year of free training and repair service. Required: 1. For the machine sold at its regular price, but with one year of "free" training and repair service, determine the dollar amount of revenue earned from the equipment sale versus the revenue earned from the training and repair services. Equipment Service Allocated Transaction Price
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