Revenues are normally recognized when the company transfers promised goods or services in the amount the company expects to be entitled to receive. Assume that the following transactions occurred in September: a. A popular ski magazine company receives a total of $13,045 today from subscribers. The subscriptions begin in the next fiscal year. Answer from the magazine company's standpoint. b. On September 1 of the current year, a bank lends $3,000 to a company; the note principal and $360 ($3,000 × 12 percent) annual interest are dye in one year. Answer from the bank's standpoint. c. Fucillo Automotive Group (offering a wide variety of car and truck brands) sells a Ford F-150 truck with a list, or "sticker," price of $20,550 for $19,050 cash. d. Macy's department store orders 1,110 men's shirts for $10 each for future delivery from PVH Corporation, manufacturer of IZOD, ARROW, Van Heusen, Calvin Klein, and Tommy Hilfiger and other brand-name apparel. The terms require payment in full within 30 days of delivery. Answer from PVH Corporation's standpoint. e. PVH Corporation completes production of the shirts described in (d) and delivers the order. Answer from PVH's standpoint. f. PVH Corporation receives payment from Macy's for the events described in (d) and (e). Answer from PVH's standpoint. g. A customer purchases a ticket from American Airlines for $720 cash to travel the following January. Answer from American Airlines's standpoint. h. Ford Motor Company issues $21.8 million in new common stock. 1. Michigan State University receives $18,550,000 cash for 79,000 seven-game season football tickets to be played in-the upcoming season. J. Michigan State plays the first football game referred to in (/). k. Precision Builders signs a contract with a customer for the construction of a new $1,650,000 warehouse. At the signing, Precision receives a check for $207,000 as a deposit on the future construction. Answer from Precision's standpoint. 1. Best Buy receives inventory of 11 laptop computers from Dell; Best Buy promises to pay $10,600 within three months. Answer from Dell's standpoint. m. Amazon.com delivers a $230 lamp to a customer who charges the purchase on his Amazon.com Store Card. Answer from Amazon's standpoint. Required: For each of the transactions, if revenue is to be recognized in September, indicate the revenue account title and amount. Note: If revenue is not recognized choose "None".

Revenues are normally recognized when the company transfers promised goods or services in the amount the company expects to be entitled to receive. Assume that the following transactions occurred in September: a. A popular ski magazine company receives a total of $13,045 today from subscribers. The subscriptions begin in the next fiscal year. Answer from the magazine company's standpoint. b. On September 1 of the current year, a bank lends $3,000 to a company; the note principal and $360 ($3,000 × 12 percent) annual interest are dye in one year. Answer from the bank's standpoint. c. Fucillo Automotive Group (offering a wide variety of car and truck brands) sells a Ford F-150 truck with a list, or "sticker," price of $20,550 for $19,050 cash. d. Macy's department store orders 1,110 men's shirts for $10 each for future delivery from PVH Corporation, manufacturer of IZOD, ARROW, Van Heusen, Calvin Klein, and Tommy Hilfiger and other brand-name apparel. The terms require payment in full within 30 days of delivery. Answer from PVH Corporation's standpoint. e. PVH Corporation completes production of the shirts described in (d) and delivers the order. Answer from PVH's standpoint. f. PVH Corporation receives payment from Macy's for the events described in (d) and (e). Answer from PVH's standpoint. g. A customer purchases a ticket from American Airlines for $720 cash to travel the following January. Answer from American Airlines's standpoint. h. Ford Motor Company issues $21.8 million in new common stock. 1. Michigan State University receives $18,550,000 cash for 79,000 seven-game season football tickets to be played in-the upcoming season. J. Michigan State plays the first football game referred to in (/). k. Precision Builders signs a contract with a customer for the construction of a new $1,650,000 warehouse. At the signing, Precision receives a check for $207,000 as a deposit on the future construction. Answer from Precision's standpoint. 1. Best Buy receives inventory of 11 laptop computers from Dell; Best Buy promises to pay $10,600 within three months. Answer from Dell's standpoint. m. Amazon.com delivers a $230 lamp to a customer who charges the purchase on his Amazon.com Store Card. Answer from Amazon's standpoint. Required: For each of the transactions, if revenue is to be recognized in September, indicate the revenue account title and amount. Note: If revenue is not recognized choose "None".

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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Transcribed Image Text:Revenues are normally recognized when the company transfers promised goods or services in the amount the company expects to be entitled to receive. Assume that the following transactions occurred in September: a. A popular ski magazine company receives a total of $13,045 today from subscribers. The subscriptions begin in the next fiscal year. Answer from the magazine company's standpoint. b. On September 1 of the current year, a bank lends $3,000 to a company; the note principal and $360 ($3,000 × 12 percent) annual interest are due in one year. Answer from the bank's standpoint. c. Fucillo Automotive Group (offering a wide variety of car and truck brands) sells a Ford F-150 truck with a list, or "sticker," price of $20,550 for $19,050 cash. d. Macy's department store orders 1,110 men's shirts for $10 each for future delivery from PVH Corporation, manufacturer of IZOD, ARROW, Van Heusen, Calvin Klein, and Tommy Hilfiger and other brand-name apparel. The terms require payment in full within 30 days of delivery. Answer from PVH Corporation's standpoint. e. PVH Corporation completes production of the shirts described in (a) and delivers the order. Answer from PVH's standpoint. f. PVH Corporation receives payment from Macy's for the events described in (d) and (e). Answer from PVH's standpoint. g. A customer purchases a ticket from American Airlines for $720 cash to travel the following January. Answer from American Airlines's standpoint. h. Ford Motor Company issues $21.8 million in new common stock. 1. Michigan State University receives $18,550,000 cash for 79,000 seven-game season football tickets to be played in the upcoming season. J. Michigan State plays the first football game referred to in (/). k. Precision Builders signs a contract with a customer for the construction of a new $1,650,000 warehouse. At the signing, Precision receives a check for $207,000 as a deposit on the future construction. Answer from Precision's standpoint. 1. Best Buy receives inventory of 11 laptop computers from Dell; Best Buy promises to pay $10,600 within three months. Answer from Dell's standpoint. m. Amazon.com delivers a $230 lamp to a customer who charges the purchase on his Amazon.com Store Card. Answer from Amazon's standpoint. Required: For each of the transactions, if revenue is to be recognized in September, indicate the revenue account title and amount. Note: If revenue is not recognized choose "None".

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