a.
Concept Introduction:
Accounting principles and assumptions: There are two types of accounting principles which are general principles and specific principles. General principles are the concepts and rules for the preparation of financial statements whereas specific principles are rules in detail that are used in reporting business transactions and events.
The amount to be reported on the financial statements for the purchased truck.
b.
Concept Introduction:
Accounting principles and assumptions: There are two types of accounting principles which are general principles and specific principles. General principles are the concepts and rules for the preparation of financial statements whereas specific principles are rules in detail that are used in reporting business transactions and events.
The monthly revenue recorded in May, June, and July applying the revenue recognition principle.
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- Complete Electronics Inc. sells a point - of -sale computer with a two- year service contract. Complete collects $3,500 cash for the selling price of the computer and $648 for the two - year service contract. How is revenue recognized? O A. Complete will record Sales Revenue of $3.500 when the computer delivered and will record revenue for the service contract as service calls are made. O B. Complete will record Sales Revenue of $2,074 per year for two years. O C. Complete will record Sales Revenue of $4,148 when the computer is delivered to the customer. O D. Complețe will record Sales Revenue of $3,500 when the computer is delivered and Service Revenue of $27 per month for 24 months.arrow_forwardDescribe the revenue recognition policy that the company should follow: Comfort Furniture sells household furniture. Customers can pay for the furniture at the time of delivery or they can wait one year to make payment. In the latter case, the customer must pay for the retail price of the furniture plus an additional 16 percent. If the customer decides to pay after one year, should Comfort Furniture report the additional 16 percent as part of the revenue from selling the furniture or should it be reported separately? Assume that the ability to collect the receivable is not an issue.arrow_forwardBig Buy Appliances sells Mike and Katy a refrigerator for $1,200 in March. Big Buy paid $500 for the refrigerator in Feburary. Big Buy received a 900 payment from Mike and Katy in March and will receive an additional 300 in April. If Big Buy uses the Accrual Basis of Accounting then the gross profit rate for the month of March would bea. 500b. 800c. 900d. 700arrow_forward
- Suppose Casey Title Company normally charges $400 for services related to selling a house. As part of a summer special, Casey offers customers a trade discount of 30%. On July 9, Linda Holmes uses the services of Casey and pays cash equal to the discounted price. Record the revenue recognized by Casey on July 9.arrow_forwardPlease help mearrow_forwardProblem: On December 31, Mr. Adrian sold equipment amounting to P640,000 with a trade discount of 6%, 1%, and term of sales of 2/45, n/60. Mr. Adrian pay the shipper of the shipping costs up to the buyer's warehouse. 1. How much is the invoice price? 2. When is the due date to avail the 2% discount? 3. What is the term of shipment? Choose if: FOB Shipping Point - Freight Collect, FOB Shipping Point - Freight Prepaid, FOB Destination - Freight Prepaid, FOB Destination - Freight Collectarrow_forward
- ! Required information [The following information applies to the questions displayed below.] Hitzu Company sold a copier (that costs $4,800) for $6,000 cash with a two-year parts warranty to a customer on August 16 of Year 1. Hitzu expects warranty costs to be 4% of dollar sales. It records warranty expense with an adjusting entry on December 31. On January 5 of Year 2, the copier requires on-site repairs that are completed the same day. The repairs cost $209 for materials taken from the parts inventory. These are the only repairs required in Year 2 for this copier. Analyze each of the following transactions: (a) the copier's sale; (b) the adjustment to recognize the warranty expense on December 31 of Year 1; and (c) the repairs that occur on January 5 of Year 2. Show each transaction's effect on the accounting equation-specifically, identify the accounts and amounts (including + or -) for each. (Enter all amounts as positive value.) Date Assets Liabilities + August 16 (+) increase…arrow_forward! Required information [The following information applies to the questions displayed below.] Hitzu Company sold a copier (that costs $4,800) for $6,000 cash with a two-year parts warranty to a customer on August 16 of Year 1. Hitzu expects warranty costs to be 4% of dollar sales. It records warranty expense with an adjusting entry on December 31. On January 5 of Year 2, the copier requires on-site repairs that are completed the same day. The repairs cost $209 for materials taken from the parts inventory. These are the only repairs required in Year 2 for this copier Analyze each of the following transactions: (a) the copier's sale; (b) the adjustment to recognize the warranty expense on December 31 of Year 1; and (c) the repairs that occur on January 5 of Year 2. Show each transaction's effect on the accounting equation-specifically, identify the accounts and amounts (including + or -) for each. Note: Enter all amounts as positive value. Date August 16 August 16 December 31 January 5…arrow_forwardBeta Company has incurred the following costs during the current year: Cost of purchases based on vendor's invoices.. Trade discounts on purchases already deducted from the vendor's invoices. • Importation duties and taxes.. • Freight and insurance on purchases. • Other handling costs relating to imports. Salaries of accounting department. • Fees paid to customs broker who processed the importation documents.. • Sales commission paid to sales agents. P 5,000,000 500,000 400,000 1,000,000 100,000 600,000 200,000 300,000 After-sales warranty costs. What is the total cost of purchases? 250,000 A. P5,700,000 В. Р6,100,000 С. Р6,700,000 D. P6,500,000arrow_forward
- Subject :- Accountarrow_forwardCharlet Company sells office chairs to its customers. On May 2, Rutherford Corporation purchased 16 of these office chairs from Charlet for a list price of $300 each. Rutherford returned 4 of the chairs on May 11, paid three-fourths of its bill on May 20 and paid the other one-fourth on May 26. Charlet offers credit terms of 7/21, n/50 to its customers. Calculate the total amount of cash Rutherford Corporation paid to Charlet for its purchase of the office chairs.arrow_forwardRequired information [The following information applies to the questions displayed below.] Hitzu Company sold a copier (that costs $4,500) for $9,000 cash with a two-year parts warranty to a customer on August 16 of Year 1. Hitzu expects warranty costs to be 6% of dollar sales. It records warranty expense with an adjusting entry on December 31. On January 5 of Year 2, the copier requires on-site repairs that are completed the same day. The repairs cost $108 for materials taken from the parts inventory. These are the only repairs required in Year 2 for this copier. Analyze each of the following transactions: (a) the copier's sale; (b) the adjustment to recognize the warranty expense on December 31 of Year 1; and (c) the repairs that occur on January 5 of Year 2. Show each transaction's effect on the accounting equation-specifically, identify the accounts and amounts (including+ or -) for each. (Enter all amounts as positive value.) Date August 16 August 16 December 31 January 5 Assets 4…arrow_forward
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