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. Variable consideration: Variable consideration refers to the uncertain transaction price that depends upon the outcome of future events. Deferred revenues: Collection of cash in advance to render service or to deliver goods in future is known as unearned revenues. These unearned revenues are considered as liabilities until they are earned. For the portion of rendered services or delivered goods, revenues would be recognized by way of passing an adjusting entry. Unearned revenue is also known as deferred revenues, because at the receiving of payment in advance, revenues are not recognized but deferred until they are earned. 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 shareholders’ equities. Credit , all increase in liabilities, revenues, and shareholders’ equities, all decrease in assets, expenses. To prepare: The journal entry S.R would record on January 1, 2016.

Question

Want to see the full answer?

Answer 1

Question

Chapter 5, Problem 5.6P

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.

Variable consideration:

Variable consideration refers to the uncertain transaction price that depends upon the outcome of future events.

Deferred revenues:

Collection of cash in advance to render service or to deliver goods in future is known as unearned revenues. These unearned revenues are considered as liabilities until they are earned. For the portion of rendered services or delivered goods, revenues would be recognized by way of passing an adjusting entry. Unearned revenue is also known as deferred revenues, because at the receiving of payment in advance, revenues are not recognized but deferred until they are earned.

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 shareholders’ equities.

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

To prepare: The journal entry S.R would record on January 1, 2016.

Requirement – 2

To determine

To prepare: The journal entry would record on January 31 to record one month of revenue.

Requirement – 3

To determine

To prepare: The journal entry for SR would record on May 31 to recognize May month revenue and any necessary revision in its estimates bonus receivable.

Expert Solution & Answer

Want to see the full answer?

Check out a sample textbook solution

See solution

Students have asked these similar questions

Can you please solve this general accounting question?

What is the average monthly return over those six months? Accounting

Regent Corp uses the straight-line method. Assets purchased between the 1st and 15th of the month are depreciated for the entire month; assets purchased after the 15th of the month are treated as though they were acquired the following month. On July 8, 20X3, Regent Corp purchased equipment for $30,000 that it expects to last for 12 years; Regent Corp expects the equipment to have a residual value of $2,000. What is the 20X3 depreciation expense for the equipment?

Answer 2

Question

Chapter 5, Problem 5.6P

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.

Variable consideration:

Variable consideration refers to the uncertain transaction price that depends upon the outcome of future events.

Deferred revenues:

Collection of cash in advance to render service or to deliver goods in future is known as unearned revenues. These unearned revenues are considered as liabilities until they are earned. For the portion of rendered services or delivered goods, revenues would be recognized by way of passing an adjusting entry. Unearned revenue is also known as deferred revenues, because at the receiving of payment in advance, revenues are not recognized but deferred until they are earned.

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 shareholders’ equities.

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

To prepare: The journal entry S.R would record on January 1, 2016.

Requirement – 2

To determine

To prepare: The journal entry would record on January 31 to record one month of revenue.

Requirement – 3

To determine

To prepare: The journal entry for SR would record on May 31 to recognize May month revenue and any necessary revision in its estimates bonus receivable.

Expert Solution & Answer

Want to see the full answer?

Check out a sample textbook solution

See solution

Answer 3

Question

Chapter 5, Problem 5.6P

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.

Variable consideration:

Variable consideration refers to the uncertain transaction price that depends upon the outcome of future events.

Deferred revenues:

Collection of cash in advance to render service or to deliver goods in future is known as unearned revenues. These unearned revenues are considered as liabilities until they are earned. For the portion of rendered services or delivered goods, revenues would be recognized by way of passing an adjusting entry. Unearned revenue is also known as deferred revenues, because at the receiving of payment in advance, revenues are not recognized but deferred until they are earned.

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 shareholders’ equities.

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

To prepare: The journal entry S.R would record on January 1, 2016.

Requirement – 2

To determine

To prepare: The journal entry would record on January 31 to record one month of revenue.

Requirement – 3

To determine

To prepare: The journal entry for SR would record on May 31 to recognize May month revenue and any necessary revision in its estimates bonus receivable.

Expert Solution & Answer

Want to see the full answer?

Check out a sample textbook solution

See solution

Answer 4

Question

Chapter 5, Problem 5.6P

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.

Variable consideration:

Variable consideration refers to the uncertain transaction price that depends upon the outcome of future events.

Deferred revenues:

Collection of cash in advance to render service or to deliver goods in future is known as unearned revenues. These unearned revenues are considered as liabilities until they are earned. For the portion of rendered services or delivered goods, revenues would be recognized by way of passing an adjusting entry. Unearned revenue is also known as deferred revenues, because at the receiving of payment in advance, revenues are not recognized but deferred until they are earned.

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 shareholders’ equities.

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

To prepare: The journal entry S.R would record on January 1, 2016.

Requirement – 2

To determine

To prepare: The journal entry would record on January 31 to record one month of revenue.

Requirement – 3

To determine

To prepare: The journal entry for SR would record on May 31 to recognize May month revenue and any necessary revision in its estimates bonus receivable.

Expert Solution & Answer

Want to see the full answer?

Check out a sample textbook solution

See solution

Answer 5

Chapter 5, Problem 5.6P

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.

Variable consideration:

Variable consideration refers to the uncertain transaction price that depends upon the outcome of future events.

Deferred revenues:

Collection of cash in advance to render service or to deliver goods in future is known as unearned revenues. These unearned revenues are considered as liabilities until they are earned. For the portion of rendered services or delivered goods, revenues would be recognized by way of passing an adjusting entry. Unearned revenue is also known as deferred revenues, because at the receiving of payment in advance, revenues are not recognized but deferred until they are earned.

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 shareholders’ equities.

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

To prepare: The journal entry S.R would record on January 1, 2016.

Requirement – 2

To determine

To prepare: The journal entry would record on January 31 to record one month of revenue.

Requirement – 3

To determine

To prepare: The journal entry for SR would record on May 31 to recognize May month revenue and any necessary revision in its estimates bonus receivable.

Answer 6

Chapter 5, Problem 5.6P

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.

Variable consideration:

Variable consideration refers to the uncertain transaction price that depends upon the outcome of future events.

Deferred revenues:

Collection of cash in advance to render service or to deliver goods in future is known as unearned revenues. These unearned revenues are considered as liabilities until they are earned. For the portion of rendered services or delivered goods, revenues would be recognized by way of passing an adjusting entry. Unearned revenue is also known as deferred revenues, because at the receiving of payment in advance, revenues are not recognized but deferred until they are earned.

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 shareholders’ equities.

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

To prepare: The journal entry S.R would record on January 1, 2016.

Answer 7

Chapter 5, Problem 5.6P

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.

Variable consideration:

Variable consideration refers to the uncertain transaction price that depends upon the outcome of future events.

Deferred revenues:

Collection of cash in advance to render service or to deliver goods in future is known as unearned revenues. These unearned revenues are considered as liabilities until they are earned. For the portion of rendered services or delivered goods, revenues would be recognized by way of passing an adjusting entry. Unearned revenue is also known as deferred revenues, because at the receiving of payment in advance, revenues are not recognized but deferred until they are earned.

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 shareholders’ equities.

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

To prepare: The journal entry S.R would record on January 1, 2016.

Answer 8

Requirement – 2

To determine

To prepare: The journal entry would record on January 31 to record one month of revenue.

Answer 9

Requirement – 2

To determine

To prepare: The journal entry would record on January 31 to record one month of revenue.

Answer 10

Requirement – 3

To determine

To prepare: The journal entry for SR would record on May 31 to recognize May month revenue and any necessary revision in its estimates bonus receivable.

Answer 11

Requirement – 3

To determine

To prepare: The journal entry for SR would record on May 31 to recognize May month revenue and any necessary revision in its estimates bonus receivable.

Answer 12

Expert Solution & Answer

Answer 13

Expert Solution & Answer

Answer 14

Want to see the full answer?

Check out a sample textbook solution

See solution

Answer 15

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 - When a contract includes an option to buy...Ch. 5 - Prob. 5.9Q Ch. 5 - Prob. 5.10Q

Videos

To prepare: The journal entry would record on January 31 to record one month of revenue.

To prepare: The journal entry for SR would record on May 31 to recognize May month revenue and any necessary revision in its estimates bonus receivable.

Want to see the full answer?

Chapter 5 Solutions