Identifying Customer Control and Recording Advance Payment Allstar Inc. sells uniforms and spirit clothing to local school teams. Allen High School placed an order for 80 items for a total selling price of $3,520 on September 14, 2020. The cost of the merchandise to Allstar Inc. is $1,784. To place the order, Allstar Inc. required an $800 down payment on September 14, 2020. Delivery of the order to Allen is completed on October 7, 2020, at which time the remaining balance was collected from Allen. a. Demonstrate the five steps of the revenue recognition process for this scenario. Description of revenue recognition step Application of the revenue recognition step Step 1 Answer Answer Step 2 Answer Answer Step 3 Answer Calculation of transaction price: Answer Step 4 Answer Answer Step 5 Answer Answer b. Record Allstar’s entry on September 14, 2020. Account Name Dr. Cr. Answer Answer Answer Answer Answer Answer c. Record Allstar’s entries on October 7, 2020. Account Name Dr. Cr. Cash Answer Answer Answer Answer Answer Sales Revenue Answer Answer To record the sale of product. Answer Answer Answer Answer Answer Answer To record the cost of sale of product. Please answer all parts of the question.

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

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Identifying Customer Control and Recording Advance Payment

Allstar Inc. sells uniforms and spirit clothing to local school teams. Allen High School placed an order for 80 items for a total selling price of $3,520 on September 14, 2020. The cost of the merchandise to Allstar Inc. is $1,784. To place the order, Allstar Inc. required an $800 down payment on September 14, 2020. Delivery of the order to Allen is completed on October 7, 2020, at which time the remaining balance was collected from Allen.

a. Demonstrate the five steps of the revenue recognition process for this scenario.

	Description of revenue recognition step	Application of the revenue recognition step
Step 1	Answer

Answer


Step 2	Answer

Answer


Step 3	Answer

Calculation of transaction price:	Answer
Step 4	Answer

Answer


Step 5	Answer

Answer

b. Record Allstar’s entry on September 14, 2020.

Account Name	Dr.	Cr.
Answer

Answer	Answer
Answer

Answer

c. Record Allstar’s entries on October 7, 2020.

Account Name	Dr.	Cr.
Cash	Answer	Answer
Answer

Answer	Answer
Sales Revenue	Answer	Answer
To record the sale of product.
Answer

Answer	Answer
Answer

Answer	Answer
To record the cost of sale of product.

Please answer all parts of the question.

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