Saar Associates sells two licenses to Kim & Company on September 1, 2021. First, in exchange for $197,000, Saar provides Kim with acopy of its proprietary investment management software, which Saar does not anticipate updating and which Kim can usepermanently. Second, in exchange for $171,000, Saar provides Kim with a three-year right to market Kim's financial advisory servicesunder the name of Saar Associates, which Saar advertises on an ongoing basis.How much revenue will Saar recognize in 2021 under this arrangement? (Do not round intermediate calculation.)Revenue

The following basic information as follows under:-Saar Associates sells two licenses to Kim &…

Answered: Saar Associates sells two licenses to…

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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Serena Inc. transferred $76,000 of accounts receivable to the Deni Bank. The transfer was made with recourse. Deni remits 89% of the factored amount to Serena and retains 11% to cover sales returns and allowances. When the bank collects the receivables, it will remit to Serena the retained amount (which Serena estimates has a fair value of $6,000). Serena anticipates a $4,000 recourse obligation. The bank charges a 2.5% fee (2.5% of $76,000), and requires that amount to be paid at the start of the factoring arrangement. Instructions: Prepare the journal entry to record the transfer on the books of Serena Inc. assuming that the sale criteria are met.
On January 1, 2021, ABC Corporation, a music record label, licensed to a customer the original version of a classical hit. The customer, a consumer products company, has the right to use the asset in all commercials, including television, radio and online advertisements for 3 years in the Philippines. In exchange for providing the license, ABC receives a consideration of P60,000 every quarter-end. The contract does not include any other goods or services to be provided by ABC. The contract is non-cancellable. The license is transferred to the customer on January 1, 2021. The appropriate discount rate is 8%. What amount of franchise revenue should be reported in 2021?
Brave Corporation authorized Heart on January 1, 2010 to operate as a franchisee for an initial franchise fee of P2,500,000. Of this amount, P1,500,000 was received upon signing of the contract and the balance is due in two equal annual payments beginning January 1, 2011. The contract provides that the nonrefundable downpayment represents fair measure of the services already performed, however, substantial performance is still required of Brave. Collectibility of the note is reasonably certain. If the present value of the two annual payments is P895,000, what amount of unearned franchise fees from Heart should Brave report on December 31, 2010?
The controller for Riverbed Corporation has reached an agreement with Concord Financing Ltd. to sell a large portion of Riverbed's past-due accounts receivable. Riverbed agrees to sell $1,950,000 of accounts receivable to Concord with recourse. Riverbed's controller estimates that the fair value of Riverbed's liability to pay Concord for uncollectible accounts is $177,000. Concord will charge Riverbed 7% of the total receivables balance as a financing fee, and will withhold an initial amount of 8%. (a) - Your answer is partially correct Calculate the net proceeds and the gain or loss on the disposal of receivables to Concord Financing Ltd Net proceeds 1657500 Loss on disposal of receivables $ 233500 i
Engelhart Company licenses customer relationship software to Kristin Incorporated for 3 years. In addition to providing the software, Engelhart promises to provide consulting services over the life of the license to maintain operability within Kristin?s computer system. The total transaction is $210,000. Based on the standalone values, Engelhart estimates the consulting services have a value of $75,000 and the software license has a value of $135,000. Upon install on July 1, 2019, Kristin pays Engelhart $100,000; the balance of the contract is due December 31, 2019. Explain how you would account and determine the revenue for 2019, assuming (a) the performance obligations are interdependent and (b) the performance obligations are not interdependent.
Company G, which has a 30 percent marginal tax rate, owns a controlling interest in Company J, which has a 12 percent marginal tax rate. Both companies perform engineering services. Company G is negotiating a contract to provide services for a client. Upon satisfactory completion of the services, the client will pay $100,000 cash. Required: Compute the after-tax cash from the contract assuming that Company G is the party to the contract and provides the services to the client. Compute the after-tax cash from the contract assuming that Company J is the party to the contract and provides the services to the client. Compute the after-tax cash flow for Company G from the contract assuming that Company J is the party to the contract, but Company G actually provides the services to the client.
ABC Inc. provided warranty for all products sold during 2021. The entity sold200,000 units during the current year. It is estimated that 75% of the products will haveno defects. 15% of the products sold will have a minor defect and 10% of the productswill have a major defect. The cost of a minor defect is P100 per unit while the cost ofmajor defect is P300. The entity is also involved in a tax dispute with BIR in 2021. Basedon legal advice, there is a 40% chance that the entity will lose the case and the entityhave to pay P 500,000.What total amount of provisions should be recorded on December 31, 2021?
Sullivan Software sells packages of a software program and one year's worth of technical support for $500. Its packaging lists the $500 sales price as comprised of a software program and technical support. All of Sullivan's sales are for cash, and there are no returns. Sullivan sells the software program separately for $475 and offers a year of technical support separately for $75. Sullivan should recognize revenue for the two parts of the arrangement as follows: Defer the entire $500 and recognize over the support period. O Recognize the portion of the $500 attributable to the software program when the customer pays cash to buy the package; defer the portion attributable to technical support and recognize over the support period. Recognize the entire $500 when the customer pays cash to buy the package. Recognize the entire $500 upon conclusion of the support period.
On June1, S offered to sell a specific generator set to B for P300,000. B sent a letter for acceptance to S on June 8. On June10, however, S became insolvent. On June 12, S received the letter of acceptance. Was the Contract perfected?
The controller for Bramble Corporation has reached an agreement with Sheffield Financing Ltd. to sell a large portion of Bramble's past-due accounts receivable. Bramble agrees to sell $1,820,000 of accounts receivable to Sheffield with recourse. Bramble's controller estimates that the fair value of Bramble's liability to pay Sheffield for uncollectible accounts is $163.000. Sheffield will charge Bramble 9% of the total receivables balance as a financing fee, and will withhold an initial amount of 10% (a) Calculate the net proceeds and the gain or loss on the disposal of receivables to Sheffield Financing Ltd. Net proceeds ✓on disposal of receivables S $
Damian Company operates a construction company. On January 1, 2021, Damian Company negotiates a new contract with Horton Hockey Association and agrees to construct a large complex for the hockey association in four phases over a 12-month period at a total cost of $1,600,000. The complex will not be usable until all construction is complete. On January 1, 2021, Horton pays Damian a refundable deposit of $100,000 and agrees to four installment payments of $375,000. The installment payments are due on March 31, 2021, June 30, 2021, September 30, 2021, and December 31, 2021. Under the contract terms, Horton has the option of ending the contract if the association is dissatisfied with the construction. To terminate the contract, the hockey association must notify Damian Company before June 30, 2021. If the hockey association decides to terminate the contract, the association will receive the January 1, 2021, refundable deposit of $100,000. If the hockey association provides a timely notice…
Harrington Company was sued by an employee in late 2020. General counsel concluded that there was an 80 percent probability that the company would lose the lawsuit. The range of possible loss is estimated to be $20,000 to $70,000, with no amount in the range more likely than any other. The lawsuit was settled in 2021, with Harrington making a payment of $60,000. Assume that Harrington Company is a U.S.-based company that is issuing securities to foreign investors who require financial statements prepared in accordance with IFRS. Thus, adjustments to convert from U.S. GAAP to IFRS must be made. Ignore income taxes. Required: a. Prepare journal entries for this lawsuit for the years ending December 31, 2020, and December 31, 2021, under (1) U.S. GAAP and (2) IFRS. b. Prepare the entry(ies) that Harrington would make on the December 31, 2020, and December 31, 2021, conversion worksheets to convert U.S. GAAP balances to IFRS. Complete this question by entering your answers in the tabs…

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