ONE Computer Solution (“ONE") provides IT solutions to corporate clients. ONE offered a price of $2,400 to Client A if he purchases an accounting software from them and choose them to do the installation. Client A agreed and entered into a contract with ONE on 1 January 2022. ONE normally charges clients $2,000 as a standalone selling price for acquiring the accounting software, at a cost of $1,100. The installation service has a standalone selling price of $500. Client A paid ONE $2,000 upon delivery and the remaining balance upon installation of the software. The accounting software was delivered on 1 February 2022. ONE completed installation on 1 March 2022 and client A paid the balance due.

ONE Computer Solution (“ONE") provides IT solutions to corporate clients. ONE offered a price of $2,400 to Client A if he purchases an accounting software from them and choose them to do the installation. Client A agreed and entered into a contract with ONE on 1 January 2022. ONE normally charges clients $2,000 as a standalone selling price for acquiring the accounting software, at a cost of $1,100. The installation service has a standalone selling price of $500. Client A paid ONE $2,000 upon delivery and the remaining balance upon installation of the software. The accounting software was delivered on 1 February 2022. ONE completed installation on 1 March 2022 and client A paid the balance due.

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

See similar textbooks

Similar questions

Sprocket, Inc. ships 150 widgets (cost $500/unit) to Bender Co. on consignment on March 31, 2022. By June 30, 2022, Bender sold 90 of the consigned widgets at the price of $800 per unit. Bender notifies Sprocket of the sales, retains an 8% commission, and remits the cash due to Sprocket. Prepare the appropriate journal entries for Sprocket on June 30 Please dont provide answer in an image format thank you
On March 1, 20X1, Token Texx (TT), a telecommunications operator, entered into a contract with Dianne Gonzales. In line with the contract, Dianne subscribes to TT’s monthly plan for 12 months, and in return, Dianne receives a free Samsung handset from TT. Dianne will pay a monthly fee of P1,200. Dianne gets the handset immediately after signing contract. TT sells the same handset for P2,400 and the same monthly plans for P800 per month without the handset. On March 1, 20X1, how much revenue from sale of goods should be recognized by TT?
Complete Electronics Inc. sells a point - of -sale computer with a two- year service contract. Complete collects $3,500 cash for the selling price of the computer and $648 for the two - year service contract. How is revenue recognized? O A. Complete will record Sales Revenue of $3.500 when the computer delivered and will record revenue for the service contract as service calls are made. O B. Complete will record Sales Revenue of $2,074 per year for two years. O C. Complete will record Sales Revenue of $4,148 when the computer is delivered to the customer. O D. Complețe will record Sales Revenue of $3,500 when the computer is delivered and Service Revenue of $27 per month for 24 months.
Software Supplier Inc. sells to a customer a perpetual software license and post-contract customer support for a 12-month period, commencing at the time that the software is activated. Software Supplier Inc. charges $240 upfront when the software is purchased and $16 a month for 12 months, due at the end of the month. Software Supplier Inc. sells the software separately for $320 while the standalone selling price of the post-contract customer support is $160. Note: Carry all decimals in calculations; round the final answer to the nearest dollar. Note: If a journal entry (or a line of the journal entry) isn't required for the transaction, select "N/A" as the account names and leave the Dr. and Cr. answers blank (zero). a. How should the transaction price be allocated among the performance obligation(s)? Performance Obligations Transaction Price as Stated Standalone Selling Price Allocated Transaction Price (rounded) Software Customer support $ $ Account Name To record sale of software.…
On February 1, 2019, the telecommunications company sold cellular phones and unlimited calls service to Customer #1 on a 24 month contract. Customer 1 pays CU30 per month for 'free' network and cell phone services. The Company sells Customer #2 the same cellular telephone for CU 150 and the same network services for CU 25 per month. The amount is also the price the company charges when the cellular phone or network service is sold separately. The time value effect of money is negligible in this case. Based on the above case, answer the following questions: How the company recognizes its revenue to Customer #1 and Customer #2? Keep a journal on February 1, 2019 and March 1, 2019
Rahe Corp. sold a customer service contract with a price of $20,000 to Peterson Warehousing. Rahe Corp. offered terms of 2/10, n/30 and expects Peterson to pay within the discount period. Required: Prepare the journal entry to record the sale using the net method. Prepare the journal entry assuming the payment is made within 10 days (within the discount period).
! Required information [The following information applies to the questions displayed below.] Franklin Training Services (FTS) provides instruction on the use of computer software for the employees of its corporate clients. It offers courses in the clients' offices on the clients' equipment. The only major expense FTS incurs is instructor salaries; it pays instructors $6,000 per course taught. FTS recently agreed to offer a course of instruction to the employees of Novak Incorporated at a price of $700 per student. Novak estimated that 20 students would attend the course. Base your answers on the preceding information. Required a. Relative to the number of students in a single course, is the cost of instruction a fixed or a variable cost? b. Determine the profit, assuming that 20 students attend the course. c. Determine the profit, assuming a 10 percent increase in enrollment (i.e., enrollment increases to 22 students). What is the percentage change in profitability? d. Determine the…
Sirius XM Holdings Incorporated sells a dash-top satellite radio receiver and one-year subscription for a total price of $80. By purchasing this deal, the subscriber is entitled to receive hardware (i.e., the radio), a software update that is automatically downloaded every second month to the radio, and continuous music service for one year from the date the hardware is delivered.Required:Identify the performance obligation(s) in this contract, and indicate whether the revenue should be recognized at a Point in time or Over time for each identified performance obligation. If the Performance Obligation is "No", then mark the Revenue recognized column with "Not affected".
UniTel Co provides a bundled-service package to B. Mann for $4,200 upfront. The service package includes upfront advice, 'on-call' advice, and database access for a 1-year period. If each service was sold separately to B. Mann the fees would be: Up-front advice: $900 On-call advice: $1,800 Database access: $2,700 Using the relative fair value approach, what is the amount of revenue recognised in relation to the on-call advice is (rounded to the nearest whole dollar): O $700 O $1,400 $1,800 $2,100
TPPG Ltd is a telecommunications provider. On 1 January 2020, the company entered into a contract to sell a phone set and to provide two-years' line service to a customer for $22 a month. The stand-alone selling price of the phone set and the service line is $120 and $20 respectively. Required: (a) Identify the performance obligations in this contract. (b) How much revenue should be recognised in the year ended 31 December 2020. Show all your workings clearly and round off answers to the nearest cent, where applicable. (c) Based on your answers in (b) above, prepare the necessary journal entries. For (b) Transaction price Stand-alone price Allocation of transaction price Handphone: Mobile service: Total
Gravity Services Ltd (GS) is a company set up in Hong Kong providing the region with cloud computingservices like servers, storage, networking and software, to help customers to meet their business challenges. During the year ended 30 September 2020, it enters into two contracts.(i) Data Tab Ltd (DT) enters into a contract with GS for the use of an identified server for three years.GS delivers and installs the server at DT’s premises in accordance with DT’s instructions, and provides repair and maintenance services for the server, as needed, throughout the period of use. GSsubstitutes the server only in the case of malfunction. DT can decide which data to be stored and howto integrate the server to its operation. DT can change its decisions on how to operate the serversthroughout the period of use (a) advise GS whether the contract (i) falls within HKFRS 16 as a lease.
Sunland Corporation operates a retail computer store. To improve delivery services to customers, the company purchases four new trucks on April 1, 2020. The terms of acquisition for each truck are described below. 1. Truck #1 has a list price of $31,350 and is acquired for a cash payment of $29,051. 2. Truck #2 has a list price of $33,440 and is acquired for a down payment of $4,180 cash and a zero-interest-bearing note with a face amount of $29,260. The note is due April 1, 2021. Sunland would normally have to pay interest at a rate of 9% for such a borrowing, and the dealership has an incremental borrowing rate of 8%. 3. Truck #3 has a list price of $33,440. It is acquired in exchange for a computer system that Sunland carries in inventory. The computer system cost $25,080 and is normally sold by Sunland for $31,768. Sunland uses a perpetual inventory system. 4. Truck #4 has a list price of $29,260. It is acquired in exchange for 1,030 shares of common stock in…