Sage Company sells total outdoor grilling solutions, providing gas and charcoal grills, accessories, and installation services for custom patio grilling stations. Respond to the requirements related to the following independent revenue arrangements for Sage products and services. Click here to view factor table. (a) Your answer is partially correct. Sage offers contract GM205, which is comprised of a free-standing gas grill for small patio use plus installation to a customer's gas line for a total price $744. On a standalone basis, the grill sells for $647 (cost $458), and Sage estimates that the standalone selling price of the installation service (based on cost-plus estimation) is $143. (The selling of the grill and the installation services should be considered two performance obligations.) Sage signed 10 GM205 contracts on April 20, 2020, and customers paid the contract price in cash. The grills were delivered and installed on May 15, 2020. Prepare journal entries for Sage for GM205 in April and May 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 answers to 0 decimal places, e.g. 5,275.)
Sage Company sells total outdoor grilling solutions, providing gas and charcoal grills, accessories, and installation services for custom patio grilling stations. Respond to the requirements related to the following independent revenue arrangements for Sage products and services. Click here to view factor table. (a) Your answer is partially correct. Sage offers contract GM205, which is comprised of a free-standing gas grill for small patio use plus installation to a customer's gas line for a total price $744. On a standalone basis, the grill sells for $647 (cost $458), and Sage estimates that the standalone selling price of the installation service (based on cost-plus estimation) is $143. (The selling of the grill and the installation services should be considered two performance obligations.) Sage signed 10 GM205 contracts on April 20, 2020, and customers paid the contract price in cash. The grills were delivered and installed on May 15, 2020. Prepare journal entries for Sage for GM205 in April and May 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 answers to 0 decimal places, e.g. 5,275.)
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:Sage Company sells total outdoor grilling solutions, providing gas and charcoal grills, accessories, and installation services for custom
patio grilling stations.
Respond to the requirements related to the following independent revenue arrangements for Sage products and services.
Click here to view factor table.
(a)
Your answer is partially correct.
Sage offers contract GM205, which is comprised of a free-standing gas grill for small patio use plus installation to a customer's gas
line for a total price $744. On a standalone basis, the grill sells for $647 (cost $458), and Sage estimates that the standalone
selling price of the installation service (based on cost-plus estimation) is $143. (The selling of the grill and the installation services
should be considered two performance obligations.) Sage signed 1O GM205 contracts on April 20, 2020, and customers paid the
contract price in cash. The grills were delivered and installed on May 15, 2020. Prepare journal entries for Sage for GM205 in
April and May 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 answers to 0 decimal places, e.g. 5,275.)
Transcribed Image Text:Date
Account Titles and Explanation
Debit
Credit
Apr. 20, 2020
Cash
7,440
Unearned Sales Revenue
Unearned Service Revenue
May 15, 2020
Unearned Sales Revenue
6,093.36
Unearned Service Revenue
1,346.64
Sales Revenue
Service Revenue
(To record sales)
Cost of Goods Sold
4,580
Apr. 17, 2020
Apr. 20, 2020
Inventory
May 15, 2020
Sep. 1, 2020
(To record cost of goods sold)
Sep. 25, 2020
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A journal entry is a form of accounting entry that is used to report a business transaction in a company's accounting records.
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