Principal Principal is the legal owner of goods or service which is transferred to the customer for legal consideration. Agent Agent is a facilitator for transferring goods and service from seller to buyers. Agent receives commission from principal for the service rendered. 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. The revenue recognition principle The revenue recognition principle refers to the revenue that should be recognized in the time period, when the performance obligation (sales or services) of the company is completed. Case summary: AC.Com sells the used products which are collected from different suppliers. A customer purchases a used bicycle from AC.Com for $300. AC.Com agrees to pay the supplier $200, and the bicycle is shipped from the supplier to the customer directly. To determine: The amount of revenue recognized at the time of the sales to the customer, and assume AC.Com takes control on used bicycle.

Question

Want to see the full answer?

Answer 1

Question

Chapter 5, Problem 5.8BYP

Requirement – 1

To determine

Principal

Principal is the legal owner of goods or service which is transferred to the customer for legal consideration.

Agent

Agent is a facilitator for transferring goods and service from seller to buyers. Agent receives commission from principal for the service rendered.

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.

The revenue recognition principle

The revenue recognition principle refers to the revenue that should be recognized in the time period, when the performance obligation (sales or services) of the company is completed.

Case summary:

AC.Com sells the used products which are collected from different suppliers. A customer purchases a used bicycle from AC.Com for $300. AC.Com agrees to pay the supplier $200, and the bicycle is shipped from the supplier to the customer directly.

To determine: The amount of revenue recognized at the time of the sales to the customer, and assume AC.Com takes control on used bicycle.

Requirement – 2

To determine

The amount of revenue recognized at the time of the sales to the customer, and assume AC.Com never takes control on used bicycle.

Requirement – 3

To determine

The amount of revenue recognized at the time of the sales to the customer, and assume AC.Com promises to pay $200 to the supplier.

Expert Solution & Answer

Want to see the full answer?

Check out a sample textbook solution

See solution

Students have asked these similar questions

d ing Enabled: Chapter 7 Required Homewor... i Albany International Corporation, originally the Albany Felt Company, is an industrial-goods company based in Rochester, New Hampshire. On June 30, Year 1, Albany International sold merchandise to its good customer ABC Inc. and accepted a noninterest- bearing note in exchange. The note requires payment of $35,000 on March 31, Year 2. The fair value of the merchandise exchanged is $33,950. Albany International views the financing component of this contract as significant. Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required: 1. Please prepare journal entries for Albany International to record the sale of merchandise (please omit any entry that might be required for the cost of the goods sold), any December 31, Year 1 interest accrual, and the March 31, Year 2 collection. 2. What is the effective interest rate on the note? Prepare journal entries to record the sale of merchandise (omit any entry…

O Question 1 40 GBI wishes to purchase Elbow Pads from Olympic Protective Gear, Data needed in various steps in the process are provided below: Qty to be purchased: 15 Delivery Date: 11/12/21 Plant: Miami Storage Location: Trading Goods Net Price: $35.00 each Vendors Invoice Amt[1] $525 Tax Code: Input Tax (XI) Your task Execute the procurement process, from requisition to payment to facilitate the above scenario. Record the resulting document numbers below: Requisition #: Purchase Order : Goods Receipt #: Invoice : Payment #: You will need to use other organizational data as needed. Hint If SAP gives a message before you save your PO showing. "the net price adopted from the last document", you can either accept the price by clicking enter or you can change it to $35 (if it is different). In either case, check the "Net value" of your PO because the PO amount should match your invoice amount and the amount you pay (and it is ok to have a different PO value than $525 but in that case,…

i need the answer quickly

Answer 2

Question

Chapter 5, Problem 5.8BYP

Requirement – 1

To determine

Principal

Principal is the legal owner of goods or service which is transferred to the customer for legal consideration.

Agent

Agent is a facilitator for transferring goods and service from seller to buyers. Agent receives commission from principal for the service rendered.

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.

The revenue recognition principle

The revenue recognition principle refers to the revenue that should be recognized in the time period, when the performance obligation (sales or services) of the company is completed.

Case summary:

AC.Com sells the used products which are collected from different suppliers. A customer purchases a used bicycle from AC.Com for $300. AC.Com agrees to pay the supplier $200, and the bicycle is shipped from the supplier to the customer directly.

To determine: The amount of revenue recognized at the time of the sales to the customer, and assume AC.Com takes control on used bicycle.

Requirement – 2

To determine

The amount of revenue recognized at the time of the sales to the customer, and assume AC.Com never takes control on used bicycle.

Requirement – 3

To determine

The amount of revenue recognized at the time of the sales to the customer, and assume AC.Com promises to pay $200 to the supplier.

Expert Solution & Answer

Want to see the full answer?

Check out a sample textbook solution

See solution

Answer 3

Question

Chapter 5, Problem 5.8BYP

Requirement – 1

To determine

Principal

Principal is the legal owner of goods or service which is transferred to the customer for legal consideration.

Agent

Agent is a facilitator for transferring goods and service from seller to buyers. Agent receives commission from principal for the service rendered.

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.

The revenue recognition principle

The revenue recognition principle refers to the revenue that should be recognized in the time period, when the performance obligation (sales or services) of the company is completed.

Case summary:

AC.Com sells the used products which are collected from different suppliers. A customer purchases a used bicycle from AC.Com for $300. AC.Com agrees to pay the supplier $200, and the bicycle is shipped from the supplier to the customer directly.

To determine: The amount of revenue recognized at the time of the sales to the customer, and assume AC.Com takes control on used bicycle.

Requirement – 2

To determine

The amount of revenue recognized at the time of the sales to the customer, and assume AC.Com never takes control on used bicycle.

Requirement – 3

To determine

The amount of revenue recognized at the time of the sales to the customer, and assume AC.Com promises to pay $200 to the supplier.

Expert Solution & Answer

Want to see the full answer?

Check out a sample textbook solution

See solution

Answer 4

Question

Chapter 5, Problem 5.8BYP

Requirement – 1

To determine

Principal

Principal is the legal owner of goods or service which is transferred to the customer for legal consideration.

Agent

Agent is a facilitator for transferring goods and service from seller to buyers. Agent receives commission from principal for the service rendered.

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.

The revenue recognition principle

The revenue recognition principle refers to the revenue that should be recognized in the time period, when the performance obligation (sales or services) of the company is completed.

Case summary:

AC.Com sells the used products which are collected from different suppliers. A customer purchases a used bicycle from AC.Com for $300. AC.Com agrees to pay the supplier $200, and the bicycle is shipped from the supplier to the customer directly.

To determine: The amount of revenue recognized at the time of the sales to the customer, and assume AC.Com takes control on used bicycle.

Requirement – 2

To determine

The amount of revenue recognized at the time of the sales to the customer, and assume AC.Com never takes control on used bicycle.

Requirement – 3

To determine

The amount of revenue recognized at the time of the sales to the customer, and assume AC.Com promises to pay $200 to the supplier.

Expert Solution & Answer

Want to see the full answer?

Check out a sample textbook solution

See solution

Answer 5

Chapter 5, Problem 5.8BYP

Requirement – 1

To determine

Principal

Principal is the legal owner of goods or service which is transferred to the customer for legal consideration.

Agent

Agent is a facilitator for transferring goods and service from seller to buyers. Agent receives commission from principal for the service rendered.

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.

The revenue recognition principle

The revenue recognition principle refers to the revenue that should be recognized in the time period, when the performance obligation (sales or services) of the company is completed.

Case summary:

AC.Com sells the used products which are collected from different suppliers. A customer purchases a used bicycle from AC.Com for $300. AC.Com agrees to pay the supplier $200, and the bicycle is shipped from the supplier to the customer directly.

To determine: The amount of revenue recognized at the time of the sales to the customer, and assume AC.Com takes control on used bicycle.

Requirement – 2

To determine

The amount of revenue recognized at the time of the sales to the customer, and assume AC.Com never takes control on used bicycle.

Requirement – 3

To determine

The amount of revenue recognized at the time of the sales to the customer, and assume AC.Com promises to pay $200 to the supplier.

Answer 6

Chapter 5, Problem 5.8BYP

Requirement – 1

To determine

Principal

Principal is the legal owner of goods or service which is transferred to the customer for legal consideration.

Agent

Agent is a facilitator for transferring goods and service from seller to buyers. Agent receives commission from principal for the service rendered.

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.

The revenue recognition principle

The revenue recognition principle refers to the revenue that should be recognized in the time period, when the performance obligation (sales or services) of the company is completed.

Case summary:

AC.Com sells the used products which are collected from different suppliers. A customer purchases a used bicycle from AC.Com for $300. AC.Com agrees to pay the supplier $200, and the bicycle is shipped from the supplier to the customer directly.

To determine: The amount of revenue recognized at the time of the sales to the customer, and assume AC.Com takes control on used bicycle.

Answer 7

Chapter 5, Problem 5.8BYP

Requirement – 1

To determine

Principal

Principal is the legal owner of goods or service which is transferred to the customer for legal consideration.

Agent

Agent is a facilitator for transferring goods and service from seller to buyers. Agent receives commission from principal for the service rendered.

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.

The revenue recognition principle

The revenue recognition principle refers to the revenue that should be recognized in the time period, when the performance obligation (sales or services) of the company is completed.

Case summary:

AC.Com sells the used products which are collected from different suppliers. A customer purchases a used bicycle from AC.Com for $300. AC.Com agrees to pay the supplier $200, and the bicycle is shipped from the supplier to the customer directly.

To determine: The amount of revenue recognized at the time of the sales to the customer, and assume AC.Com takes control on used bicycle.

Answer 8

Requirement – 2

To determine

The amount of revenue recognized at the time of the sales to the customer, and assume AC.Com never takes control on used bicycle.

Answer 9

Requirement – 2

To determine

The amount of revenue recognized at the time of the sales to the customer, and assume AC.Com never takes control on used bicycle.

Answer 10

Requirement – 3

To determine

The amount of revenue recognized at the time of the sales to the customer, and assume AC.Com promises to pay $200 to the supplier.

Answer 11

Requirement – 3

To determine

The amount of revenue recognized at the time of the sales to the customer, and assume AC.Com promises to pay $200 to the supplier.

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 - 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 that AC.Com is the legal owner of goods or services which are transferred to the customer for legal consideration, and an agent receives commission for the service rendered.

The amount of revenue recognized at the time of the sales to the customer, and assume AC.Com never takes control on used bicycle.

The amount of revenue recognized at the time of the sales to the customer, and assume AC.Com promises to pay $200 to the supplier.

Want to see the full answer?

Chapter 5 Solutions