See the problem Question:Aussy Football Co. had a player contract with Jats thatis recorded in its books at $4,800,000 on September 1,2019. Day Football Co. had a player contract with Virtzthat is recorded in its books at $6,000,000 on September1, 2019. On this date, Aussy traded Jats to Day forVirtz and paid a cash difference of $600,000. The fairvalue of the Virtz contract was $7,200,000 on theexchange date. The exchange had no commercialsubstance. After the exchange, the Virtz contractshould be recorded in Aussy's books at $ ?

Explanation of Book ValueBook value refers to the value at which an asset is recorded in a company's…

Answered: Question: Aussy Football Co. had a…

SWFT Individual Income Taxes

43rd Edition

ISBN:9780357391365

Author:YOUNG

Publisher:YOUNG

Chapter18: Accounting Periods And Methods

Section: Chapter Questions

Problem 18DQ

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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.
Winnie Corporation purchases Joshua Company and, as part of the contract, will have to pay Joshua an additional $100,000 if the company achieves certain revenue goals for two years after the acquisition. How should Winnie account for this contingent payment?
On January 1, 2023, Crane Company enters into a contract to transfer Product A and Product B to Shamrock Co. for $132,000. The contract specifies that payment for Product A will not occur until Product B is also delivered. In other words, payment will not occur until both Product A and Product B are transferred to Shamrock. Crane determines that stand-alone prices are $31,200 for Product A and $100,800 for Product B. Crane delivers Product A to Shamrock on February 1, 2023. On March 1, 2023, Crane delivers Product B to Shamrock. What journal entries should Crane make in regard to this contract in 2023? (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 0 for the amounts. List all debit entries before credit entries. Record journal entries in the order presented in the problem.) Date Account Titles Debit Credit
On January 1, 2018, Laramie Inc. acquired land for $6.2 million. Laramie paid $1.2 million in cash and signed a 6% note requiring the company to pay the remaining $5 million plus interest on December 31, 2019. An interest rate of 6% properly reflects the time value of money for this type of loan agreement. For what amount should Laramie record the purchase of land?
Red Maple Co. enters into a contract to sell Product Y and Product Z on January 2, 2021, for an upfront cash payment of $150,000. Product Y will be delivered in two years (January 2, 2023) and Product Z will be delivered in five years (January 2, 2026). Red Maple Co. allocates the $150,000 to Products Y and Z on a relative stand-alone selling price basis as follows. Stand-Alone Selling Prices Percent Allocated Allocated Amounts Product Y $ 40,000 25% $ 37,500 Product Z 120,000 75% 112,500 $160,000 $150,000 Red Maple Co. uses an interest rate of 6%, which is its incremental borrowing rate. Required Prepare the journal entries needed on January 2, 2021, and December 31, 2021. Prepare the journal entry needed on December 31, 2022. Prepare the journal entry needed on January 2, 2023. Using Excel or a financial calculator, calculate the amount of revenue to be recognized for Product Z and prepare the journal entry needed on January 2,…
Christina Co. has a factory equipment with a carrying amount of P700,000 and has a remaining useful life of 7 years. On January 1, 2020, Christina agreed to an exchange transaction with Kat & Inc. to transfer the equipment to the latter. The transfer satisfied the requirements of PFRS 15 to be a sale and Christina immediately leased it back for a lease term equal to the remaining life of the equipment. The sales price amounted to P500,000 while annual rental payable at the end of each year is P100,000 for an implicit rate of 10%. Selling price is equal to fair value. How much loss shall Christina recognize in relation to the sale and leaseback transaction? a. 681,578.63 b. 200,000 c. 194,736.75 d. 5,263.25
On January 1, 2022, Blight Stones obtained a franchise from Doug Corporation to sell for 20 years Doug’s product. The initial franchise fee as agreed upon shall be P6,000,000, and shall be payable in cash, P1,000,000, when the contract is signed and the balance in four equal installments thereafter, as evidenced by a noninterest bearing note. The agreement provides that the franchisor shall provide the necessary initial services required under a franchise contract. The agreement also provides that 5% of the revenue from the franchise must be paid to the franchisor. Revenue from the franchise for 2022 was P5,000,000. The present value factor of P1 at 12% for 4 periods 0.6355 The present value factor of P1 ordinary annuity at 12% for 4 periods 3.0373 23) How much is the initial cost of the franchise? 24) How much is the total expenses for the year 2022?
Instructions Daniels Company engaged in the following transactions during 2020: a. Purchased s25,000 of merchandise from XYZ Supplies on January 26. Amount due in full on February 28. b. Paid for 40% of the purchased merchandise (Transaction a) on February 26. c. On February 28, negotiate a payment extension with XYZ for the remainder of the balance from the January 26 purchase by signing a 1-year, 8% note. d. Borrowed S500,000 on an 8-month, 9% interest-bearing note on July 31. e. Purchased $140,000 of merchandise on August 2. Amount due in full on September 30. f. Paid for the purchased merchandise (Transaction e) on September 28. g. Received from Martel Inc. on October 4, a S60,000 deposit against a total selling price of $600,000 for services to be performed for Martel. h. Paid quarterly installments of Social Security, Medicare, and individual income tax withholdings, as shown below, on October 10. The Social Security and Medicare were previously recorded as expenses during the…
On August 1, 2019, Aiken Corp. enters into a contract with Benton Corp. to sell it $25,000 of goods. Aiken will deliver the goods on August 30, 2019, and Benton will pay the full amount upon acceptance. The goods were manufactured by Aiken at a cost of $18,000. Both Aiken and Benton consider the acceptance of the goods on August 30 a formality given that Benton has purchased the same goods from Aiken numerous times without incident. On August 30, 2019, Aiken delivers the goods and Benton transfers cash to Aiken. required: 1.Prepare the journal entries in August 2019 necessary to account for this transaction. Assume Aiken uses a perpetual inventory system
On March 01, 2021, WX entered into a franchise contract with YZ. The franchise agreement required the franchisee, YZ, to pay a nonrefundable upfront fee in the amount of P1,440,000 and on-going payment of royalties equivalent to 5% of the sales of the franchisee. YZ paid the non-refundable upfront fee on March 01, 2021. In relation to the nonrefundable upfront fee, the franchise agreement required WX to render the following performance obligations: To construct the franchisee's stall with stand-alone selling price of P300,000. To supply cooking equipment and cash registers. Price of competitors for the similar items (cooking equipment and cash registers) is valued at P240,000 while the forecast of the expected cost of AshLloyd for the performance obligation is P200,000 plus an appropriate margin above cost of 25%. To deliver 10,000 units of raw materials to YZ with stand-alone selling price of P460,000. To allow YZ to use the entity's tradename for a period of 10 years starting on the…
Respond to the requirements in each situation. Instructions a. On January 1, 2020, Zarle Inc. sold computer equipment to Daniell Co. The sales price of the equipment was $520,000 and its carrying amount is $400,000. Record any journal entries necessary for Zarle from the sale of the computer equipment in 2020. b. Use the information from part a. Assume that, on the same day the sale occurred, Zarle enters into an agreement to lease the equipment from Daniell for 10 years with annual lease payments of $67,342.42 at the end of each year, beginning on December 31, 2020. If Zarle has an incremental borrowing rate of 5% and the equipment has an economic useful life of 10 years, record any journal entries necessary for Zarle from the sale and leaseback of computer equipment in 2020. c. Use the information from part b. Now, instead of 10 years, the lease term is only 3 years with annual lease payments of $67,342.42 at the beginning of each year. Record any journal entries necessary…
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