On June 1, 2025, Pharoah Company sells $197,000 of shelving units to a local retailer, Coronado, which is planning to expand its stores in the area. Under the agreement, Coronado asks Pharoah to retain the shelving units at its factory until the new stores are ready for installation. Title passes to Coronado at the time the agreement is signed. The shelving units are delivered to the stores on September 1, 2025, and Coronado pays in full. Prepare the journal entries for this bill-and-hold arrangement (assuming that conditions for recognizing the sale as a bill-and-hold sale have been met) for Pharoah on June 1 and September 1, 2025. The cost of the shelving units to Pharoah is $121,000. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No entry" for the account titles and enter O for the amounts. List all debit entries before credit entries. Record journal entries in the order presented in the problem.) Date Account Titles and Explanation (To record sales) (To record cost of goods sold) Debit Credit

On June 1, 2025, Pharoah Company sells $197,000 of shelving units to a local retailer, Coronado, which is planning to expand its stores in the area. Under the agreement, Coronado asks Pharoah to retain the shelving units at its factory until the new stores are ready for installation. Title passes to Coronado at the time the agreement is signed. The shelving units are delivered to the stores on September 1, 2025, and Coronado pays in full. Prepare the journal entries for this bill-and-hold arrangement (assuming that conditions for recognizing the sale as a bill-and-hold sale have been met) for Pharoah on June 1 and September 1, 2025. The cost of the shelving units to Pharoah is $121,000. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No entry" for the account titles and enter O for the amounts. List all debit entries before credit entries. Record journal entries in the order presented in the problem.) Date Account Titles and Explanation (To record sales) (To record cost of goods sold) Debit Credit

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 13E: On March 1, 2019, Elkhart enters into a new contract to build a specialized warehouse for 7 million....

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On March 1, 2019, Elkhart enters into a new contract to build a specialized warehouse for 7 million. The promise to transfer the warehouse is determined to be a performance obligation. The contract states that if the warehouse is usable by November 30, 2019, Elkhart will receive a bonus of 600,000. For every week after November 30 that the warehouse is not usable, the bonus will decrease by 150,000. Elkhart provides the following completion schedule: Required: 1. Assume that Elkhart uses the expected value approach. What amount should Elkhart use for the transaction price? 2. Assume that Elkhart uses the most likely amount approach. What amount should Elkhart use for the transaction price? 3. Next Level What is the purpose of assessing whether a constraint on the variable consideration exists?
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