Performance obligation: Performance obligation is the promise made by the seller to supply the goods and service to the customer on or before the contract. Transaction price: Transaction price refers to the price that is paid at the time of delivery or after delivery of goods and/or services. Specific situations affecting the transaction price are as follows: Variable amount of consideration and the restriction on its recognition. Rights for sales return Whether the seller is acting as a principal or an agent Time value of money Payments by the seller to the customer. Rules of Debit and Credit: Following rules are followed for debiting and crediting different accounts while they occur in business transactions: Debit , all increase in assets, expenses and dividends, all decrease in liabilities, revenues and stockholders’ equities. Credit , all increase in liabilities, revenues, and stockholders’ equities, all decrease in assets, expenses. To determine: The number of performance obligations exist in the contract.

Question

Want to see the full answer?

Answer 1

Question

Chapter 5, Problem 5.5E

Requirement – 1

To determine

Performance obligation:

Performance obligation is the promise made by the seller to supply the goods and service to the customer on or before the contract.

Transaction price:

Transaction price refers to the price that is paid at the time of delivery or after delivery of goods and/or services. Specific situations affecting the transaction price are as follows:

Variable amount of consideration and the restriction on its recognition.

Rights for sales return

Whether the seller is acting as a principal or an agent

Time value of money

Payments by the seller to the customer.

Rules of Debit and Credit:

Following rules are followed for debiting and crediting different accounts while they occur in business transactions:

Debit, all increase in assets, expenses and dividends, all decrease in liabilities, revenues and stockholders’ equities.

Credit, all increase in liabilities, revenues, and stockholders’ equities, all decrease in assets, expenses.

To determine: The number of performance obligations exist in the contract.

Requirement – 2

To determine

To prepare: The journal entry for Gold examiner would record on March 1.

Requirement – 3

To determine

To prepare: The journal entry for Gold examiner would record on March 30.

Requirement – 4

To determine

To prepare: The journal entry for Gold examiner would record on April 1.

Expert Solution & Answer

Want to see the full answer?

Check out a sample textbook solution

See solution

Students have asked these similar questions

I need the correct answer to this financial accounting problem using the standard accounting approach.

What is the level of its accounts receivable?

A Company forecasts that total overhead for the current year will be $18,000,000 and that total machine hours will be 300,000 hours. Year to date, the actual overhead is $8,000,000 and the actual machine hours are 200,000 hours. If the A Company uses a predetermined overhead rate based on machine hours for applying overhead, as of this point in time (year to date) the overhead is over/under applied by?

Answer 2

Question

Chapter 5, Problem 5.5E

Requirement – 1

To determine

Performance obligation:

Performance obligation is the promise made by the seller to supply the goods and service to the customer on or before the contract.

Transaction price:

Transaction price refers to the price that is paid at the time of delivery or after delivery of goods and/or services. Specific situations affecting the transaction price are as follows:

Variable amount of consideration and the restriction on its recognition.

Rights for sales return

Whether the seller is acting as a principal or an agent

Time value of money

Payments by the seller to the customer.

Rules of Debit and Credit:

Following rules are followed for debiting and crediting different accounts while they occur in business transactions:

Debit, all increase in assets, expenses and dividends, all decrease in liabilities, revenues and stockholders’ equities.

Credit, all increase in liabilities, revenues, and stockholders’ equities, all decrease in assets, expenses.

To determine: The number of performance obligations exist in the contract.

Requirement – 2

To determine

To prepare: The journal entry for Gold examiner would record on March 1.

Requirement – 3

To determine

To prepare: The journal entry for Gold examiner would record on March 30.

Requirement – 4

To determine

To prepare: The journal entry for Gold examiner would record on April 1.

Expert Solution & Answer

Want to see the full answer?

Check out a sample textbook solution

See solution

Answer 3

Question

Chapter 5, Problem 5.5E

Requirement – 1

To determine

Performance obligation:

Performance obligation is the promise made by the seller to supply the goods and service to the customer on or before the contract.

Transaction price:

Transaction price refers to the price that is paid at the time of delivery or after delivery of goods and/or services. Specific situations affecting the transaction price are as follows:

Variable amount of consideration and the restriction on its recognition.

Rights for sales return

Whether the seller is acting as a principal or an agent

Time value of money

Payments by the seller to the customer.

Rules of Debit and Credit:

Following rules are followed for debiting and crediting different accounts while they occur in business transactions:

Debit, all increase in assets, expenses and dividends, all decrease in liabilities, revenues and stockholders’ equities.

Credit, all increase in liabilities, revenues, and stockholders’ equities, all decrease in assets, expenses.

To determine: The number of performance obligations exist in the contract.

Requirement – 2

To determine

To prepare: The journal entry for Gold examiner would record on March 1.

Requirement – 3

To determine

To prepare: The journal entry for Gold examiner would record on March 30.

Requirement – 4

To determine

To prepare: The journal entry for Gold examiner would record on April 1.

Expert Solution & Answer

Want to see the full answer?

Check out a sample textbook solution

See solution

Answer 4

Question

Chapter 5, Problem 5.5E

Requirement – 1

To determine

Performance obligation:

Performance obligation is the promise made by the seller to supply the goods and service to the customer on or before the contract.

Transaction price:

Transaction price refers to the price that is paid at the time of delivery or after delivery of goods and/or services. Specific situations affecting the transaction price are as follows:

Variable amount of consideration and the restriction on its recognition.

Rights for sales return

Whether the seller is acting as a principal or an agent

Time value of money

Payments by the seller to the customer.

Rules of Debit and Credit:

Following rules are followed for debiting and crediting different accounts while they occur in business transactions:

Debit, all increase in assets, expenses and dividends, all decrease in liabilities, revenues and stockholders’ equities.

Credit, all increase in liabilities, revenues, and stockholders’ equities, all decrease in assets, expenses.

To determine: The number of performance obligations exist in the contract.

Requirement – 2

To determine

To prepare: The journal entry for Gold examiner would record on March 1.

Requirement – 3

To determine

To prepare: The journal entry for Gold examiner would record on March 30.

Requirement – 4

To determine

To prepare: The journal entry for Gold examiner would record on April 1.

Expert Solution & Answer

Want to see the full answer?

Check out a sample textbook solution

See solution

Answer 5

Chapter 5, Problem 5.5E

Requirement – 1

To determine

Performance obligation:

Performance obligation is the promise made by the seller to supply the goods and service to the customer on or before the contract.

Transaction price:

Transaction price refers to the price that is paid at the time of delivery or after delivery of goods and/or services. Specific situations affecting the transaction price are as follows:

Variable amount of consideration and the restriction on its recognition.

Rights for sales return

Whether the seller is acting as a principal or an agent

Time value of money

Payments by the seller to the customer.

Rules of Debit and Credit:

Following rules are followed for debiting and crediting different accounts while they occur in business transactions:

Debit, all increase in assets, expenses and dividends, all decrease in liabilities, revenues and stockholders’ equities.

Credit, all increase in liabilities, revenues, and stockholders’ equities, all decrease in assets, expenses.

To determine: The number of performance obligations exist in the contract.

Requirement – 2

To determine

To prepare: The journal entry for Gold examiner would record on March 1.

Requirement – 3

To determine

To prepare: The journal entry for Gold examiner would record on March 30.

Requirement – 4

To determine

To prepare: The journal entry for Gold examiner would record on April 1.

Answer 6

Chapter 5, Problem 5.5E

Requirement – 1

To determine

Performance obligation:

Performance obligation is the promise made by the seller to supply the goods and service to the customer on or before the contract.

Transaction price:

Transaction price refers to the price that is paid at the time of delivery or after delivery of goods and/or services. Specific situations affecting the transaction price are as follows:

Variable amount of consideration and the restriction on its recognition.

Rights for sales return

Whether the seller is acting as a principal or an agent

Time value of money

Payments by the seller to the customer.

Rules of Debit and Credit:

Following rules are followed for debiting and crediting different accounts while they occur in business transactions:

Debit, all increase in assets, expenses and dividends, all decrease in liabilities, revenues and stockholders’ equities.

Credit, all increase in liabilities, revenues, and stockholders’ equities, all decrease in assets, expenses.

To determine: The number of performance obligations exist in the contract.

Answer 7

Chapter 5, Problem 5.5E

Requirement – 1

To determine

Performance obligation:

Performance obligation is the promise made by the seller to supply the goods and service to the customer on or before the contract.

Transaction price:

Transaction price refers to the price that is paid at the time of delivery or after delivery of goods and/or services. Specific situations affecting the transaction price are as follows:

Variable amount of consideration and the restriction on its recognition.

Rights for sales return

Whether the seller is acting as a principal or an agent

Time value of money

Payments by the seller to the customer.

Rules of Debit and Credit:

Following rules are followed for debiting and crediting different accounts while they occur in business transactions:

Debit, all increase in assets, expenses and dividends, all decrease in liabilities, revenues and stockholders’ equities.

Credit, all increase in liabilities, revenues, and stockholders’ equities, all decrease in assets, expenses.

To determine: The number of performance obligations exist in the contract.

Answer 8

Requirement – 2

To determine

To prepare: The journal entry for Gold examiner would record on March 1.

Answer 9

Requirement – 2

To determine

To prepare: The journal entry for Gold examiner would record on March 1.

Answer 10

Requirement – 3

To determine

To prepare: The journal entry for Gold examiner would record on March 30.

Answer 11

Requirement – 3

To determine

To prepare: The journal entry for Gold examiner would record on March 30.

Answer 12

Requirement – 4

To determine

To prepare: The journal entry for Gold examiner would record on April 1.

Answer 13

Requirement – 4

To determine

To prepare: The journal entry for Gold examiner would record on April 1.

Answer 14

Expert Solution & Answer

Answer 15

Expert Solution & Answer

Answer 16

Want to see the full answer?

Check out a sample textbook solution

See solution

Answer 17

Ch. 5 - What are the five key steps a company follows to...Ch. 5 - What indicators suggest that a performance...Ch. 5 - What criteria determine whether a company can...Ch. 5 - We recognize service revenue either at one point...Ch. 5 - What characteristics make a good or service a...Ch. 5 - Prob. 5.6Q Ch. 5 - What must a contract include for the contract to...Ch. 5 - How might the definition of probable affect...Ch. 5 - When a contract includes an option to buy...Ch. 5 - Prob. 5.10Q

Solution Summary: The author explains the number of performance obligations in the contract. Gold bar comprises 96% of the total fair values, and insurance comprises 4%.

Concept explainers

To prepare: The journal entry for Gold examiner would record on March 1.

To prepare: The journal entry for Gold examiner would record on March 30.

To prepare: The journal entry for Gold examiner would record on April 1.

Want to see the full answer?

Chapter 5 Solutions