Concept explainers
Requirement – 1
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
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
Requirement – 2
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.
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Chapter 6 Solutions
INTERMEDIATE ACCOUNTING ACCESS 540 DAY
- What is the correct option?arrow_forwardWhat is the materials quantity variance ?arrow_forwardCold Goose Metal Works Inc. just reported earnings after tax (also called net income) of $9,750,000, and a current stock price of $34.00 per share. The company is forecasting an increase of 25% for its after-tax income next year, but it also expects it will have to issue 2,900,000 new shares of stock (raising its shares outstanding from 5,500,000 to 8,400,000). a. If Cold Goose's forecast turns out to be correct and its price-to-earnings (P/E) ratio does not change, what does the company's management expect its stock price to be one year from now (Round any P/E ratio calculation to four decimal places). A. $27.85 per share B. $34.00 per share C. $20.89 per share D. $34.81 per share b. One year later, Cold Goose's shares are trading at $48.36 per share, and the company reports the value of its total common equity as $46,788,000. Given this information, Cold Goose's market-to-book (M/B) ratio isarrow_forward
- Pkg Acc Infor Systems MS VISIO CDFinanceISBN:9781133935940Author:Ulric J. GelinasPublisher:CENGAGE L
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