machines during January elected to pay at the end of the 12-month period. Required: 1. Determine the transaction price of the Osgilith MRI machines, and discuss how Palantir would account for the sales commission. 2. Discuss whether the delayed payment contract contains a significant financing component. 3. Prepare the journal entries for 2017 for the Osgilith MRI machines sold by Palantir to customers who elect the delayed payment option. 4. Prepare the 2017 journal entries that Palantir would make for the 10 Osgilith MRI machines that are sold if customers elect to pay at delivery.

machines during January elected to pay at the end of the 12-month period. Required: 1. Determine the transaction price of the Osgilith MRI machines, and discuss how Palantir would account for the sales commission. 2. Discuss whether the delayed payment contract contains a significant financing component. 3. Prepare the journal entries for 2017 for the Osgilith MRI machines sold by Palantir to customers who elect the delayed payment option. 4. Prepare the 2017 journal entries that Palantir would make for the 10 Osgilith MRI machines that are sold if customers elect to pay at delivery.

Intermediate Accounting: Reporting And Analysis

3rd Edition

ISBN:9781337788281

Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Chapter17: Advanced Issues In Revenue Recognition

Section: Chapter Questions

Problem 5P

See similar textbooks

Similar questions

On December 1, 2019, AwakcAllNight Inc. sells 5,000 super caffeinated candy bars to Campus Grocers. The candy bars sell for 3 per bar. In addition, AwakcAllNight pays Campus Grocers a 900placement fee to ensure that its candy bars are always stocked prominently by the cash register. The 900 is paid at the end of each month based on the results of random inspections of Campus Grocers by AwakcAllNight to ensure that the terms of the contract are being followed. Required: 1. Determine the transaction price for Awake AllNights revenue contract. 2. Prepare AwakeAllNights journal entries to recognize sales revenue and pay Campus Grocers the placement fee.
Patty Corp., a public company, delivers 3,200 units to a customer on 1 April for $80/unit. Patty Corp. has a return policy where they allow any customer to return any unused product within 45 days and receive a full refund. The cost of each product is $64. Based on historical experience Patty estimates that customer will return 2% of the units sold. Patty expects to be able to resell any returned goods. Assume that 50 products are returned on 2 May. No additional units are returned by 15 May (the end of the return period). Required: Prepare the journal entries related to the sale of products. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.) View transaction list Journal entry worksheet < 1 2 3 4 5 6 Prepare the journal entry required on 1 April to record the sale: Note: Enter debits before credits. Date 1 April General Journal Debit Credit
The AAA Branch of SSS Company provided the following information related to its operations for the last quarter of 2020: The store sold 15,000 units at P78.00 each, after having purchased the units from various suppliers for P45.15. AAA Branch's salespeople are paid a 5% commission based on gross sales pesos. AAA sales manager oversees the placement of local advertising contracts, which totaled P154,000 for the year. Local property taxes amounted to P18,600. The sales manager's P25,000 monthly salary is set by AAA's store manager. In contrast, the store manager's P50,000 monthly salary is determined by SSS Company's vice president. AAA incurred last quarter an P16,800 of other noncontrollable costs along with P10,000 of income tax expense. ! Nontraceable (common) company overhead totaled P58,000 during the period. sss Company's corporate headquarter is located in New York and the company uses responsibility accounting to evaluate performance. Required: Prepare a segmented income…
I need the answer as soon as possible
Sew & More sells sewing machines and sewing supplies. The company recently ran a sales promotion on sewing machines that allowed customers to purchase a new sewing machine using store credit. The terms of the contract stated that customers would make 12 monthly payments that included a 6% annual interest rate. On the date of each sale, Sew & More should record. No revenue until the contract is paid in full. Sales revenue equal to the sales price of the sewing machine, interest revenue equal to the total amount of interest for the contract, and a receivable for the total of the sales price plus the interest. revenue equal to the sales price of the sewing machine plus the total interest to be collected and a receivable for the same amount. revenue equal to the sales price of the sewing machine and a receivable for the same amount.
Romano Services provides room cleaning arrangements for hotels in Ohio. On April 1, Silvia Hotels & Resorts signed an agreement to outsource its room-cleaning functions to Romano. The contract specifies the service fee to be $15,000 per month, and all payments are to be made shortly after the end of each quarter. It also specifies that Romano will receive an additional quarterly bonus of $3,000 if, during that quarter, Silvia receives no more than five complaints from customers about room cleanliness. On April 1, based on historical experience, Romano estimated that there is a 75% chance that it will receive the quarterly bonus. On May 5, Romano learned that, during March, there were two complaints from customers related to room cleanliness. Based on this new information, Romano revised its estimate downward to 40% that it would be entitled to receive the quarterly bonus. On June 30, Silvia notified Romano that, for the quarter ended, there were four complaints associated with…
Romano Services provides room cleaning arrangements for hotels in Ohio. On April 1, Silvia Hotels & Resorts signed an agreement to outsource its room-cleaning functions to Romano. The contract specifies the service fee to be $23,500 per month, and all payments are to be made shortly after the end of each quarter. It also specifies that Romano will receive an additional quarterly bonus of $8,100 if, during that quarter, Silvia receives no more than five complaints from customers about room cleanliness. On April 1, based on historical experience, Romano estimated that there is a 75% chance that it will receive the quarterly bonus. On May 5, Romano learned that, during March, there were two complaints from customers related to room cleanliness. Based on this new information, Romano revised its estimate downward to 40% that it would be entitled to receive the quarterly bonus. On June 30, Silvia notified Romano that, for the quarter ended, there were four complaints associated with…
Manual Company sells goods to Nolan Company during 2017. It offers Nolan the following rebates based on total sales to Nolan. If total sales to Nolan are 10,000 units, it will grant a rebate of 2%. If it sells up to 20,000 units, it will grant a rebate of 4%. If it sells up to 30,000 units, it will grant a rebate of 6%. In the first quarter of the year, Manual sells 11,000 units to Nolan at a sales price of $110,000. Manual, based on past experience, has sold over 40,000 units to Nolan, and these sales normally take place in the third quarter of the year. What amount of revenue should Manual report for the sale of the 11,000 units in the first quarter of the year?
Anas Company sells 6,000 units of its product for $500 each during the year ending December 31, 2017. The selling price includes a one-year warranty on parts. It is expected that 3% of the units will be defective and that repair costs will average $50 per unit. In the year of sale, warranty contracts are honored on 120 units for a total cost of $6,000. What amount will be reported on Lulzbot.com's balance sheet as Warranty Liability on December 31, 2017? Select one: a. It cannot be determined. b. $3,000 C. S6,000 d. $9,000
Headland Company sells goods to Sage Company during 2017. It offers Sage the following rebates based on total sales to Sage. If total sales to Sage are 10,500 units, it will grant a rebate of 3%. If it sells up to 18,600 units, it will grant a rebate of 4%. If it sells up to 29,200 units, it will grant a rebate of 7%. In the first quarter of the year, Headland sells 10,400 units to Sage at a sales price of $104,000. Headland, based on past experience, has sold over 42,900 units to Sage, and these sales normally take place in the third quarter of the year.What amount of revenue should Headland report for the sale of the 10,400 units in the first quarter of the year. Revenue $
Squeaky Shine provides car washing services in Jersey City, New Jersey. A three-month pass for automatic car wash sells for $60, which entitles the customer for an unlimited number of car washes during the contract period. Squeaky Shine estimates that pass holders wash their cars equally throughout the three-month period. On December 1st, customers purchased $2,160 of the three-month passes, with usage of the passes occurring evenly throughout the contract period. Required: 1. Prepare the journal entries that Squeaky Shine would record on December 1 and on December 31, 2024, with respect to this transaction. 2. State the account titles and amounts that will be included in Squeaky Shine's 2024 income statement and balance sheet. Complete this question by entering your answers in the tabs below. Required 1 Required 2 State the account titles and amounts that will be included in Squeaky Shine's 2024 income statement and balance sheet. Account Titles Amounts Income Statement and Balance…
Portelli Services provides room-cleaning arrangements for hotels in Pennsylvania. On April 1, Silvia Hotels & Resorts signed an agreement to outsource its room-cleaning functions to Portelli. The contract specifies the service fee to be $15,000 per month, and all payments are to be made shortly after the end of each quarter. It also specifies that Portelli will receive an additional quarterly bonus of $3,000 if, during that quarter, Silvia receives no more than five complaints from customers about room cleanliness. • On April 1, based on historical experience, Portelli estimated that there is a 75% chance that it will receive the quarterly bonus. On May 5, Portelli learned that, during March, there were two complaints from customers related to room cleanliness. Based on this new information, Portelli revised its estimate downward to 40% that it would be entitled to receive the quarterly bonus. On June 30, Silvia notified Portelli that, for the quarter ended, there were four complaints…