Financial Accounting Standards Board (FASB): FASB is an independent 7 member board, of accounting professionals overseeing the creation of financial statement. FASB standards are generally known as GAAP. Variable consideration: Variable consideration refers to the uncertain transaction price that depends upon the outcome of future events. 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 principle 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 discuss: The accounting for variable consideration arising from sales-based royalties on licenses of intellectual property, and when T can recognize the revenue for sales.

Question

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Answer 1

Question

Chapter 5, Problem 5.9P

Requirement – 1

To determine

Financial Accounting Standards Board (FASB):

FASB is an independent 7 member board, of accounting professionals overseeing the creation of financial statement. FASB standards are generally known as GAAP.

Variable consideration:

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

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 principle 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 discuss: The accounting for variable consideration arising from sales-based royalties on licenses of intellectual property, and when T can recognize the revenue for sales.

Requirement – 2

To determine

To prepare: The journal entry to record revenue from license.

Requirement – 3

To determine

To prepare: The journal entry to record revenue recognized on December 31, 2018.

Requirement – 4

To determine

To prepare: The journal entry to record deferred revenue on April, 1 and December 31, 2018.

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Students have asked these similar questions

Suppose you take out a five-year car loan for $14000, paying an annual interest rate of 4%. You make monthly payments of $258 for this loan. Complete the table below as you pay off the loan. Months Amount still owed 4% Interest on amount still owed (Remember to divide by 12 for monthly interest) Amount of monthly payment that goes toward paying off the loan (after paying interest) 0 14000 1 2 3 + LO 5 6 7 8 9 10 10 11 12 What is the total amount paid in interest over this first year of the loan?

Suppose you take out a five-year car loan for $12000, paying an annual interest rate of 3%. You make monthly payments of $216 for this loan. mocars Getting started (month 0): Here is how the process works. When you buy the car, right at month 0, you owe the full $12000. Applying the 3% interest to this (3% is "3 per $100" or "0.03 per $1"), you would owe 0.03*$12000 = $360 for the year. Since this is a monthly loan, we divide this by 12 to find the interest payment of $30 for the month. You pay $216 for the month, so $30 of your payment goes toward interest (and is never seen again...), and (216-30) = $186 pays down your loan. (Month 1): You just paid down $186 off your loan, so you now owe $11814 for the car. Using a similar process, you would owe 0.03* $11814 = $354.42 for the year, so (dividing by 12), you owe $29.54 in interest for the month. This means that of your $216 monthly payment, $29.54 goes toward interest and $186.46 pays down your loan. The values from above are included…

Suppose you have an investment account that earns an annual 9% interest rate, compounded monthly. It took $500 to open the account, so your opening balance is $500. You choose to make fixed monthly payments of $230 to the account each month. Complete the table below to track your savings growth. Months Amount in account (Principal) 9% Interest gained (Remember to divide by 12 for monthly interest) Monthly Payment 1 2 3 $500 $230 $230 $230 $230 + $230 $230 10 6 $230 $230 8 9 $230 $230 10 $230 11 $230 12 What is the total amount gained in interest over this first year of this investment plan?

Answer 2

Question

Chapter 5, Problem 5.9P

Requirement – 1

To determine

Financial Accounting Standards Board (FASB):

FASB is an independent 7 member board, of accounting professionals overseeing the creation of financial statement. FASB standards are generally known as GAAP.

Variable consideration:

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

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 principle 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 discuss: The accounting for variable consideration arising from sales-based royalties on licenses of intellectual property, and when T can recognize the revenue for sales.

Requirement – 2

To determine

To prepare: The journal entry to record revenue from license.

Requirement – 3

To determine

To prepare: The journal entry to record revenue recognized on December 31, 2018.

Requirement – 4

To determine

To prepare: The journal entry to record deferred revenue on April, 1 and December 31, 2018.

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Answer 3

Question

Chapter 5, Problem 5.9P

Requirement – 1

To determine

Financial Accounting Standards Board (FASB):

FASB is an independent 7 member board, of accounting professionals overseeing the creation of financial statement. FASB standards are generally known as GAAP.

Variable consideration:

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

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 principle 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 discuss: The accounting for variable consideration arising from sales-based royalties on licenses of intellectual property, and when T can recognize the revenue for sales.

Requirement – 2

To determine

To prepare: The journal entry to record revenue from license.

Requirement – 3

To determine

To prepare: The journal entry to record revenue recognized on December 31, 2018.

Requirement – 4

To determine

To prepare: The journal entry to record deferred revenue on April, 1 and December 31, 2018.

Expert Solution & Answer

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See solution

Answer 4

Question

Chapter 5, Problem 5.9P

Requirement – 1

To determine

Financial Accounting Standards Board (FASB):

FASB is an independent 7 member board, of accounting professionals overseeing the creation of financial statement. FASB standards are generally known as GAAP.

Variable consideration:

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

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 principle 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 discuss: The accounting for variable consideration arising from sales-based royalties on licenses of intellectual property, and when T can recognize the revenue for sales.

Requirement – 2

To determine

To prepare: The journal entry to record revenue from license.

Requirement – 3

To determine

To prepare: The journal entry to record revenue recognized on December 31, 2018.

Requirement – 4

To determine

To prepare: The journal entry to record deferred revenue on April, 1 and December 31, 2018.

Expert Solution & Answer

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Answer 5

Chapter 5, Problem 5.9P

Requirement – 1

To determine

Financial Accounting Standards Board (FASB):

FASB is an independent 7 member board, of accounting professionals overseeing the creation of financial statement. FASB standards are generally known as GAAP.

Variable consideration:

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

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 principle 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 discuss: The accounting for variable consideration arising from sales-based royalties on licenses of intellectual property, and when T can recognize the revenue for sales.

Requirement – 2

To determine

To prepare: The journal entry to record revenue from license.

Requirement – 3

To determine

To prepare: The journal entry to record revenue recognized on December 31, 2018.

Requirement – 4

To determine

To prepare: The journal entry to record deferred revenue on April, 1 and December 31, 2018.

Answer 6

Chapter 5, Problem 5.9P

Requirement – 1

To determine

Financial Accounting Standards Board (FASB):

FASB is an independent 7 member board, of accounting professionals overseeing the creation of financial statement. FASB standards are generally known as GAAP.

Variable consideration:

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

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 principle 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 discuss: The accounting for variable consideration arising from sales-based royalties on licenses of intellectual property, and when T can recognize the revenue for sales.

Answer 7

Chapter 5, Problem 5.9P

Requirement – 1

To determine

Financial Accounting Standards Board (FASB):

FASB is an independent 7 member board, of accounting professionals overseeing the creation of financial statement. FASB standards are generally known as GAAP.

Variable consideration:

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

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 principle 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 discuss: The accounting for variable consideration arising from sales-based royalties on licenses of intellectual property, and when T can recognize the revenue for sales.

Answer 8

Requirement – 2

To determine

To prepare: The journal entry to record revenue from license.

Answer 9

Requirement – 2

To determine

To prepare: The journal entry to record revenue from license.

Answer 10

Requirement – 3

To determine

To prepare: The journal entry to record revenue recognized on December 31, 2018.

Answer 11

Requirement – 3

To determine

To prepare: The journal entry to record revenue recognized on December 31, 2018.

Answer 12

Requirement – 4

To determine

To prepare: The journal entry to record deferred revenue on April, 1 and December 31, 2018.

Answer 13

Requirement – 4

To determine

To prepare: The journal entry to record deferred revenue on April, 1 and December 31, 2018.

Answer 14

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Answer 15

Expert Solution & Answer

Answer 16

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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 accounting for variable consideration arising from sales-based royalties on licenses of intellectual property, and when T can recognize revenue for sales.

To prepare: The journal entry to record revenue from license.

To prepare: The journal entry to record revenue recognized on December 31, 2018.

To prepare: The journal entry to record deferred revenue on April, 1 and December 31, 2018.

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Chapter 5 Solutions