Paul, Inc., agrees to transfer television sets to an The consignee is to sell a set at 40% above cost exclusive of freight and is to receive a 10% commission on sales price. The consignor agrees to reimburse the consignee for all expenses related to the consignment. The agreement also calls for advance payment by the consignee of 30% per set based on selling price; the said advance is to be deducted as settlement is made for each set sold. The consignee is to provide an account sale quarterly and is to make cash remittance for the amount owed at that time. The following consignment sales activities occurred during the October 1 to December 31 of current year:

Paul, Inc., agrees to transfer television sets to an The consignee is to sell a set at 40% above cost exclusive of freight and is to receive a 10% commission on sales price. The consignor agrees to reimburse the consignee for all expenses related to the consignment. The agreement also calls for advance payment by the consignee of 30% per set based on selling price; the said advance is to be deducted as settlement is made for each set sold. The consignee is to provide an account sale quarterly and is to make cash remittance for the amount owed at that time. The following consignment sales activities occurred during the October 1 to December 31 of current year:

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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LG Inc. agrees to transfer television sets to SM Home Appliances on consignment. The consignee is to sell sets at P17,000 and is to receive a 20% commission on sales price. The consignor agrees to reimburse the consignees for all expenses related to the consignment. The agreement also calls for an advance payment of P5,000 per set by the consignee, the P5,000 advance is to be deducted as settlement is made for each set sold. The consignee is to provide account sales quarterly and is to make a cash remittance for the amount owed at that time. Transactions for the period follows: The consignor shipped 10 sets to the consignee. The consignor maintains a cost accounting system and perpetual records. The cost is P9,000 each. The consignor paid freight charges of P16,500. The consignee made advance payments on the sets received. The consignee sold 6 sets for cash, expenses of delivery and installation chargeable were P2,750. The consignee returned all the remaining sets and paid…
Sanchez Co. enters into a contract to sell Product A and Product B on January 2, 20x5, for an upfront cash payment of 300,000. Product A will be delivered in 2 years (January 2, 20x7) and Product B will be delivered in 5 years (January 2, 2020). Sanchez Co. allocates the 300,000 to Products A and B on a relative standalone selling price basis as follows. Standalone Selling Price Percent Allocated Allocated Amount Product A 80,000 25% 75,000 Product B 240,000 75% 225,000 320,000 300,000 Sanchez Co. uses an interest rate of 6%, which is its incremental borrowing rate.INSTRUCTIONS1. (a) Prepare the journal entries necessary on January 2, 20x5, and December 31, 20x52. (b) Prepare the journal entries necessary on December 21, 20x6.3. (c) Prepare the journal entries necessary on January 2, 20x7
A On January 1. 2020. Machinery Corp. enters into a contract with a customer for the sale of a machine and related one year maintenance services for a total contract price of P2000.000. Machinery Corp. regularly sells these items separately. If they were to be purchased separately, their stand-alone selling prices are as follows: P1.800.000 for the machines and P600.000 for the one-year maintenance services Machinery Corp transfers the machine, and collects the total contract price on February 1, 2020 The maintenance services start on that date. Required Analyze the five steps of model of revenue recognition
Watts Inc. charges an initial franchise fee of P690,000, with P150,000 paid when the agreement is signed and the balance in five annual payments. The present value of the future payments, discounted at 10%, is P409,400. The franchisee has the option to purchase P90,000 of equipment for P70,000. Watts has substantially provided all initial services required and collectability of the payments is reasonably assured. The amount of revenue from franchise fees is?
A. On January 1, 2020, Machinery Corp. enters into a contract with a customer for the sale of a machine and relatedone-yearmaintenance services for a total contract price of P2,000.000. Machinery Corp. regulariy sells these items separately. If they were to be purchased separately, their stand-alone selling prices are as follows: • P1,800,000 for the machine; and P600,000 for the one-year maintenance services Machinery Corp transfesthe machine, andcolects the total contract price, on February 1, 2020. The maintenance services start on that date. Required: Analyze the five steps of model of revenue recognition.
Sunland Company sells goods that cost $300,000 to Marigold Company for $400,000 on January 2, 2020. The sales price includes an installation fee, which is valued at $36,900. The fair value of the goods is $373,100. The goods were delivered on March 1, 2020. Installation is considered a separate performance obligation and was completed on June 18, 2020. Under the terms of the contract, Marigold Company pays Sunland $254,000 upon delivery of the goods and the balance at the completion of the installation. Using the five-step process for revenue recognition, determine when and how much revenue would be recognized by Sunland. Assume IFRS is followed. (Round percentage allocations to 2 decimal places, 15.25 and final answers to 0 decimal places, e.g. 5,275.) Performance Obligation When? How much? Deliver goods choose a transaction date January 2, 2020March 1, 2020June 18, 2020 $enter a dollar…
Cass Company enters into a contract with Dearborn Inc. to sell it $50,000 of goods with delivery on May 10, 2019. Cass manufactured the goods at a cost of $33,000. The contract is signed on April 15, 2019, at which time Dearborn pays Cass $25,000. Cass delivers the goods on May 10, 2019, and Dearborn pays the final $25,000 on that date. Required: 1. What is the transaction price? 2. Prepare Cass’s journal entries related to the contract with Dearborn.
Sandhill Company sells goods that cost $275,000 to Indigo Company for $440,000 on January 2, 2020. The sales price includes an installation fee, which is valued at $41,400. The fair value of the goods is $408,600. The goods were delivered on March 1, 2020. Installation is considered a separate performance obligation and was completed on June 18, 2020. Under the terms of the contract, Indigo Company pays Sandhill $260,000 upon delivery of the goods and the balance at the completion of the installation.
Sandhill Company sells goods that cost $275,000 to Indigo Company for $440,000 on January 2, 2020. The sales price includes an installation fee, which is valued at $41,400. The fair value of the goods is $408,600. The goods were delivered on March 1, 2020. Installation is considered a separate performance obligation and was completed on June 18, 2020. Under the terms of the contract, Indigo Company pays Sandhill $260,000 upon delivery of the goods and the balance at the completion of the installation.
Oriole Company sells goods that cost $320,000 to Sheffield Company for $435,000 on January 2, 2020. The sales price includes an installation fee, which is valued at $35,600. The fair value of the goods is $409,400. The goods were delivered on March 1, 2020. Installation is considered a separate performance obligation and was completed on June 18, 2020. Under the terms of the contract, Sheffield Company pays Oriole $257,000 upon delivery of the goods and the balance at the completion of the installation. Questions in pictures.
Oriole Company sells goods that cost $290,000 to William Company for $445,000 on January 2, 2023. The sales price includes an installation fee, which is valued at $36,400. The fair value of the goods is $418,600. The goods were delivered on March 1, 2023. Installation is considered a separate performance obligation and was completed on June 18, 2023. Under the terms of the contract, William pays Oriole $265,000 on delivery of the goods and the balance at the completion of the installation. (a) Using the five-step process for revenue recognition, determine when and how much revenue would be recognized by Oriole. Assume IFRS is followed. (Round percentage allocations to 2 decimal places, 15.25% and final answers to O decimal places, e.g. 5,275.) Performance Obligation Deliver goods Installation Total eTextbook and Media List of Accounts Save for Later When? $ tA $ How much? Attempts: 0 of 3 used Submit Answer
Cass Company enters into a contract with Dearborn Inc. to sell it $50,000 of goods with delivery on May 10, 2019. Cass manufactured the goods at a cost of $33,000. The contract is signed on April 15, 2019, at which time Dearborn pays Cass $25,000. Cass delivers the goods on May 10, 2019, and Dearborn pays the final $25,000 on that date. Required: 1. On what date does a contract exist between Cass and Dearborn? 2. What are Cass’s performance obligations in the contract? 3. What is the transaction price? 4. Does this transaction price need to be allocated? 5. Prepare Cass’s journal entries related to the contract with Dearborn.