Chapter 18, Problem 23E

To determine

Revenue recognition: GAAP (Generally accepted accounting principle) states that under specific conditions only the revenue is recognized and accounted for.

(a)

To explain: To explain the type of revenue recognition transaction presented in the question data.

Given information: All the information related to W-M Company is provided in the question document.

To determine

(b)

To determine the factors that should be considered in determining when to recognize revenue in the transaction provided in the question data.

Given information: All the information related to W-M Company is provided in the question document.

To determine

(c)

To prepare: To prepare the journal entry (ies) that W-M should make, assuming that it has already signed a valid sales contract to sell the counters and received a deposit of $300,000 at that time.

Given information: All the information related to W-M Company is provided in the question document.