On January 31, O’Malley Company contracted to have two products built by Taylor Manufacturing for a total of P185,000. The contract specifies that payment will only occur after both products have been transferred to O’Malley Company. O’Malley determines that the standalone prices are P100,000 for Product 1 and P85,000 for Product 2. On August 1, when Product1 has been transferred, the journal entry to record this event include a: a. Debit to Contract Assets for P85,000 b. Debit to Contract Assets for P100,000
On January 31, O’Malley Company contracted to have two products built by Taylor Manufacturing for a total of P185,000. The contract specifies that payment will only occur after both products have been transferred to O’Malley Company. O’Malley determines that the standalone prices are P100,000 for Product 1 and P85,000 for Product 2. On August 1, when Product1 has been transferred, the journal entry to record this event include a: a. Debit to Contract Assets for P85,000 b. Debit to Contract Assets for P100,000
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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On January 31, O’Malley Company contracted to have two products built by Taylor Manufacturing for a total of P185,000. The contract specifies that payment will only occur after both products have been transferred to O’Malley Company. O’Malley determines that the standalone prices are
P100,000 for Product 1 and P85,000 for Product 2. On August 1, when Product1 has been transferred, the
a. Debit to Contract Assets for P85,000
b. Debit to Contract Assets for P100,000
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