On May 1, 20x6, Chrome Computer Inc., enters into a contract to sell 5,000 units of keyboard to one of its clients, Website Inc., at a fixed price of P95,000, to be settled by a cash payment on May 1. Delivery is scheduled for June 1, 20x6. As part of the contract, the seller offers a 25% discount coupon to Website for any purchases in the next six months. The seller will continue to offer a 5% discount on all sales during the same time period, which will be available to all customers. Based on experience, Chrome Computer estimates a 50% probability that Website will redeem the 25% discount voucher, and that the coupon will be applied to P20,000 of purchases. The stand-alone selling price for the Comfort Office Keyboard is P19.60 per unit. Assume the facts and circumstances as above, except that Chrome gives a 5% discount option to Website instead of 25%. In this case, what journal entry would Chrome record on May 1, 20x6? a. DR Cash 95,000 CR Deferred revenue – keyboards 95,000 b. DR Cash 95,000 CR Revenue – keyboards 93,100 CR Deferred revenue – discount option 1,900
Master Budget
A master budget can be defined as an estimation of the revenue earned or expenses incurred over a specified period of time in the future and it is generally prepared on a periodic basis which can be either monthly, quarterly, half-yearly, or annually. It helps a business, an organization, or even an individual to manage the money effectively. A budget also helps in monitoring the performance of the people in the organization and helps in better decision-making.
Sales Budget and Selling
A budget is a financial plan designed by an undertaking for a definite period in future which acts as a major contributor towards enhancing the financial success of the business undertaking. The budget generally takes into account both current and future income and expenses.
On May 1, 20x6, Chrome Computer Inc., enters into a contract to sell 5,000 units of keyboard to one of its clients, Website Inc., at a fixed price of P95,000, to be settled by a cash payment on May 1. Delivery is scheduled for June 1, 20x6. As part of the contract, the seller offers a 25% discount
coupon to Website for any purchases in the next six months. The seller will continue to offer a 5% discount on all sales during the same time period, which will be available to all customers. Based on experience, Chrome Computer estimates a 50% probability that Website will redeem the 25%
discount voucher, and that the coupon will be applied to P20,000 of purchases. The stand-alone selling price for the Comfort Office Keyboard is P19.60 per unit.
Assume the facts and circumstances as above, except that Chrome gives a 5% discount option to Website instead of 25%. In this case, what
a. DR Cash 95,000
CR Deferred revenue – keyboards 95,000
b. DR Cash 95,000
CR Revenue – keyboards 93,100
CR Deferred revenue – discount option 1,900
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