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 Variable consideration: Variable consideration refers to the uncertain transaction price that depends upon the outcome of future events. 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 prepare: The journal entry to record F’s sale on June 1, 2018.

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Answer 1

Question

Chapter 6, Problem 6.14E

Requirement – 1

To determine

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

Variable consideration:

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

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 prepare: The journal entry to record F’s sale on June 1, 2018.

Requirement – 2

To determine

To prepare: The journal entry to record F’s purchase of advertising services from W on June 15, 2018.

Requirement – 3

To determine

To prepare: The journal entry to record the cash received from W on June 30, 2018

Requirement – 4

To determine

To discuss: The effect of recognized revenue when it is uncollectible accounts.

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Martin Hughes earns net self-employment income of $157,100. He works a second job from which he receives FICA taxable earnings of $127,600.Self-Employment tax =

Question 2 U. Richards does not keep his books on the double entry system. His bank summary amount for 2010 is as follows: Balance 1.1.2010 1890 Receipts from $44656 debtors Creditors Loan from U. Miller $2.000 Rates Rent Drawings Cash withdrawn from bank $540 0 Payment to Trade $316 95 2750 1316 3095 1642 Sundry Expense Records of cash paid were sundry $122, trade creditors $642. Cash sales amounted to cash drawings were $5289. The following information is also available: 31.12.201 31.12.2 0 011 Cash in hand $48 $93 Trade creditors $4896 $5091 Accounts Receivables 60 $71 13 32 Rent Owing $250 Rates in Advance $282 $312 Motor van (at valuation) 2800 2400 Stock 11163 13021 Required: A. Statement of Affairs. (to find opening capital as at 31.12.2010) B. Cash Account & Bank Account. C. Accounts Receivables & Accounts Payables Control A/Cs. D. Income Statement for the year ended 31 December 2011.

2: Martin Hughes earns net self-employment income of $157,100. He works a second job from which he receives FICA taxable earnings of $127,600. Self-Employment tax = $ 6,440.70 3: Elisa Grant earns net self-employment income of $198,000. She works a second job from which she receives FICA taxable earnings of $100,400. Self-Employment tax = $ 30,294.00

Answer 2

Question

Chapter 6, Problem 6.14E

Requirement – 1

To determine

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

Variable consideration:

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

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 prepare: The journal entry to record F’s sale on June 1, 2018.

Requirement – 2

To determine

To prepare: The journal entry to record F’s purchase of advertising services from W on June 15, 2018.

Requirement – 3

To determine

To prepare: The journal entry to record the cash received from W on June 30, 2018

Requirement – 4

To determine

To discuss: The effect of recognized revenue when it is uncollectible accounts.

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Answer 3

Question

Chapter 6, Problem 6.14E

Requirement – 1

To determine

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

Variable consideration:

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

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 prepare: The journal entry to record F’s sale on June 1, 2018.

Requirement – 2

To determine

To prepare: The journal entry to record F’s purchase of advertising services from W on June 15, 2018.

Requirement – 3

To determine

To prepare: The journal entry to record the cash received from W on June 30, 2018

Requirement – 4

To determine

To discuss: The effect of recognized revenue when it is uncollectible accounts.

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Answer 4

Question

Chapter 6, Problem 6.14E

Requirement – 1

To determine

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

Variable consideration:

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

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 prepare: The journal entry to record F’s sale on June 1, 2018.

Requirement – 2

To determine

To prepare: The journal entry to record F’s purchase of advertising services from W on June 15, 2018.

Requirement – 3

To determine

To prepare: The journal entry to record the cash received from W on June 30, 2018

Requirement – 4

To determine

To discuss: The effect of recognized revenue when it is uncollectible accounts.

Expert Solution & Answer

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Answer 5

Chapter 6, Problem 6.14E

Requirement – 1

To determine

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

Variable consideration:

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

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 prepare: The journal entry to record F’s sale on June 1, 2018.

Requirement – 2

To determine

To prepare: The journal entry to record F’s purchase of advertising services from W on June 15, 2018.

Requirement – 3

To determine

To prepare: The journal entry to record the cash received from W on June 30, 2018

Requirement – 4

To determine

To discuss: The effect of recognized revenue when it is uncollectible accounts.

Answer 6

Chapter 6, Problem 6.14E

Requirement – 1

To determine

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

Variable consideration:

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

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 prepare: The journal entry to record F’s sale on June 1, 2018.

Answer 7

Chapter 6, Problem 6.14E

Requirement – 1

To determine

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

Variable consideration:

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

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 prepare: The journal entry to record F’s sale on June 1, 2018.

Answer 8

Requirement – 2

To determine

To prepare: The journal entry to record F’s purchase of advertising services from W on June 15, 2018.

Answer 9

Requirement – 2

To determine

To prepare: The journal entry to record F’s purchase of advertising services from W on June 15, 2018.

Answer 10

Requirement – 3

To determine

To prepare: The journal entry to record the cash received from W on June 30, 2018

Answer 11

Requirement – 3

To determine

To prepare: The journal entry to record the cash received from W on June 30, 2018

Answer 12

Requirement – 4

To determine

To discuss: The effect of recognized revenue when it is uncollectible accounts.

Answer 13

Requirement – 4

To determine

To discuss: The effect of recognized revenue when it is uncollectible accounts.

Answer 14

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Answer 15

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Answer 16

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Answer 17

Ch. 6 - What are the five key steps a company follows to...Ch. 6 - What indicators suggest that a performance...Ch. 6 - What criteria determine whether a company can...Ch. 6 - We recognize service revenue either at one point...Ch. 6 - What characteristics make a good or service a...Ch. 6 - Prob. 6.6Q Ch. 6 - What must a contract include for the contract to...Ch. 6 - How might the definition of probable affect...Ch. 6 - When a contract includes an option to buy...Ch. 6 - Prob. 6.10Q

Solution Summary: The author explains the rules of debiting and crediting different accounts while they occur in business transactions.

Concept explainers

To prepare: The journal entry to record F’s purchase of advertising services from W on June 15, 2018.

To prepare: The journal entry to record the cash received from W on June 30, 2018

To discuss: The effect of recognized revenue when it is uncollectible accounts.

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Chapter 6 Solutions