P18-8 (LO2,3) (Time Value, Gift Cards, Discounts) Presented below are two independent revenue arrangements for Colbert Company. Instructions Respond to the requirements related to each revenue arrangement. (a) Colbert sells 3D printer systems. Recently, Colbert provided a special promotion of zero-interest financing for 2 years on any new 3D printer system. Assume that Colbert sells Lyle Cartright a 3D system, receiving a $5,000 zero-interest- bearing note on January 1, 2017. The cost of the 3D printer system is $4,000. Colbert imputes a 6% interest rate on this zero-interest note transaction. Prepare the journal entry to record the sale on January 1, 2017, and compute the total amount of revenue to be recognized in 2017. (b) Colbert sells 20 nonrefundable $100 gift cards for 3D printer paper on March 1, 2017. The paper has a standalone selling price of $100 (cost $80). The gift cards expiration date is June 30, 2017. Colbert estimates that customers will not redeem 10% of these gift cards. The pattern of redemption is as follows. Redemption Total March 31 50% April 30 June 30 80 85 Prepare the 2017 journal entries related to the gift cards at March 1, March 31, April 30, and June 30.

P18-8 (LO2,3) (Time Value, Gift Cards, Discounts) Presented below are two independent revenue arrangements for Colbert Company. Instructions Respond to the requirements related to each revenue arrangement. (a) Colbert sells 3D printer systems. Recently, Colbert provided a special promotion of zero-interest financing for 2 years on any new 3D printer system. Assume that Colbert sells Lyle Cartright a 3D system, receiving a $5,000 zero-interest- bearing note on January 1, 2017. The cost of the 3D printer system is $4,000. Colbert imputes a 6% interest rate on this zero-interest note transaction. Prepare the journal entry to record the sale on January 1, 2017, and compute the total amount of revenue to be recognized in 2017. (b) Colbert sells 20 nonrefundable $100 gift cards for 3D printer paper on March 1, 2017. The paper has a standalone selling price of $100 (cost $80). The gift cards expiration date is June 30, 2017. Colbert estimates that customers will not redeem 10% of these gift cards. The pattern of redemption is as follows. Redemption Total March 31 50% April 30 June 30 80 85 Prepare the 2017 journal entries related to the gift cards at March 1, March 31, April 30, and June 30.

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Presented below are two independent revenue arrangements for Colbert Company. Instructions Respond to the requirements related to each revenue arrangement. a. Colbert sells 3D printer systems. Recently, Colbert provided a special promotion of zero-interest financing for 2 years on any new 3D printer system. Assume that Colbert sells Lyle Cartright a 3D system, receiving a $5,000 zero-interest-bearing note on January 1, 2020. The cost of the 3D printer system is $4,000. Colbert imputes a 6% interest rate on this zero-interest note transaction. Prepare the journal entry to record the sale on January 1, 2020, and compute the total amount of revenue to be recognized in 2020. b. Colbert sells 20 nonrefundable $100 gift cards for 3D printer paper on March 1, 2020. The paper has a standalone selling price of $100 (cost $80). The gift cards expiration date is June 30, 2020. Colbert estimates that customers will not redeem 10% of these gift cards. The pattern of redemption is as follows.…
(Time Value, Gift Cards, Discounts) Presented below are two independent revenue arrangements for Colbert Company.InstructionsRespond to the requirements related to each revenue arrangement.(a) Colbert sells 3D printer systems. Recently, Colbert provided a special promotion of zero-interest financing for 2 years on any new 3D printer system. Assume that Colbert sells Lyle Cartright a 3D system, receiving a $5,000 zero-interest bearing note on January 1, 2017. The cost of the 3D printer system is $4,000. Colbert imputes a 6% interest rate on this zero-interest note transaction. Prepare the journal entry to record the sale on January 1, 2017, and compute the total amount of revenue to be recognized in 2017.(b) Colbert sells 20 nonrefundable $100 gift cards for 3D printer paper on March 1, 2017. The paper has a standalone selling price of $100 (cost $80). The gift cards expiration date is June 30, 2017. Colbert estimates that customers will not redeem 10% of these gift cards. The pattern…
Presented below are two independent revenue arrangements for Pharoah Company. Respond to the requirements related to each revenue arrangement. Click here to view factor table. Pharoah sells 3D printer systems. Recently, Pharoah provided a special promotion of zero-interest financing for 2 years on any new 3D printer system. Assume that Pharoah sells University co-op a 3D system, receiving a $5,100 zero-interest-bearing note on March 1, 2020. The cost of the 3D printer system is $3,060. Pharoah imputes a 8% interest rate on this zero-interest note transaction. Prepare the journal entry to record the sale on March 1, 2020. (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. Round present value factor calculations to 5 decimal places, e.g. 1.25124 and the final answer to 0 decimal places, eg. 58,971.) Account Titles and Explanation Debit Credit…
TBTF Incorporated rents commercial real state to locally based businesses. TBTF purchased a large office complex on January 2, 2022. In exchange for the real estate, TBTF issued a noninterest bearing note to the seller. This note will be paid in equal instalments that include both principal and interest at the end of each calendar year. Other information pertaining to the purchase of the real estate follows: Annual instalment payment amount Market rate of borrowing for TBTF Number of years note will be outstanding Portion of the purchase price to be allocated to land Portion of the purchase price to be allocated to land improvements $ 253,134 8% 9 24% 14% TBTF has a year end date of December 31. Required: Prepare the journal entries required by TBTF to account for the note on each of the following dates: January 2, 2022 December 31, 2024
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Oo.185. Subject : - Account
Arctic Cat sold Seneca Motor Sports a shipment of snowmobiles. The snowmobiles were delivered on January 1, 2021, and Arctic received a note from Seneca indicating that Seneca will pay Arctic $43,500 on a future date. Unless informed otherwise, assume that Arctic views the time value of money component of this arrangement to be significant and that the relevant interest rate is 9%. (FV of $1, PV of $1, FVA of $1, PVA of $1, FVAD of $1 and PVAD of $1) (Use appropriate factor(s) from the tables provided.)Required: Assume the note indicates that Seneca is to pay Arctic the $43,500 due on the note on December 31, 2021. Prepare the journal entry for Arctic to record the sale on January 1, 2021. Assume the same facts as in requirement 1, and prepare the journal entry for Arctic to record collection of the payment on December 31, 2021. Assume instead that Seneca is to pay Arctic the $43,500 due on the note on December 31, 2022. Prepare the journal entry for Arctic to record the sale on…
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Zahava Corporation sells equipment to Ari Company for $700,000. Ari does not need the equipment until December 31, 2021, but agrees to pay $600,000 immediately on December 31, 2019, in order to assist Zahava with finances. The remaining $100,000 is due upon delivery on December 31, 2021. Zahava typically can borrow at 5%. 1. Prepare the journal entry Zahava makes to record the receipt of $600,000 on December 31, 2019. 2. Prepare the jornal entry, if any, Zahava makes in 2020. 3. Prepare the journal entry Zahava makes to record delivery of the goods and collection of the remaining $100,000 on December 31, 2021.
Zephyr Company is provided a grant by a foreign government for the purpose of acquiring land for a building site. The grant is a zero-interest loan for 5 years evidenced by a promissory note. The loan was granted on January 1, 2021 for 8,000,000. The market rate of interest is 6%. The present value of 1 for five periods at 6% is .7473. Required: Prepare journal entries for 2021 and 2022.