Super Clubs Hotels, Inc. has signed a service outsourcing contract with Quality Rooms, Inc. for $3 million, which was received in cash at contract inception. Under the agreement, Quality Rooms is obligated to clean and prepare over 5,000 hotels rooms managed by Super Clubs on a daily basis from September 1, 2020 to August 31, 2021. Required: Prepare any journal entry that Quality would record: (1) at inception of the contract and (2) at the end of 2020 to recognize all revenue associated with this contract that should be recognized in 2020.
Super Clubs Hotels, Inc. has signed a service outsourcing contract with Quality Rooms, Inc. for $3 million, which was received in cash at contract inception. Under the agreement, Quality Rooms is obligated to clean and prepare over 5,000 hotels rooms managed by Super Clubs on a daily basis from September 1, 2020 to August 31, 2021. Required: Prepare any journal entry that Quality would record: (1) at inception of the contract and (2) at the end of 2020 to recognize all revenue associated with this contract that should be recognized in 2020.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
Question
Super Clubs Hotels, Inc. has signed a service outsourcing contract with Quality Rooms, Inc. for $3 million, which was received in cash at contract inception. Under the agreement, Quality Rooms is obligated to clean and prepare over 5,000 hotels rooms managed by Super Clubs on a daily basis from September 1, 2020 to August 31, 2021.
Required:
Prepare any
(1) at inception of the contract and
(2) at the end of 2020 to recognize all revenue associated with this contract that should be recognized in 2020.
Expert Solution
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
This is a popular solution!
Trending now
This is a popular solution!
Step by step
Solved in 2 steps
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.Recommended textbooks for you
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Horngren's Cost Accounting: A Managerial Emphasis…
Accounting
ISBN:
9780134475585
Author:
Srikant M. Datar, Madhav V. Rajan
Publisher:
PEARSON
Intermediate Accounting
Accounting
ISBN:
9781259722660
Author:
J. David Spiceland, Mark W. Nelson, Wayne M Thomas
Publisher:
McGraw-Hill Education
Financial and Managerial Accounting
Accounting
ISBN:
9781259726705
Author:
John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting Principles
Publisher:
McGraw-Hill Education