Intermediate Accounting
1st Edition
ISBN: 9780132162302
Author: Elizabeth A. Gordon, Jana S. Raedy, Alexander J. Sannella
Publisher: PEARSON
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Textbook Question
Chapter 8, Problem 8.13BE
Allocation of Transaction Price. Sycamore enters into a contract with a customer to sell three products for a total transaction price of $15,000 Each product is appropriately classified as a separate performance obligation Sycamore only sells products A and B on an individual basis so it must estimate the standalone selling price for cement Information related to these three products is provided in the following table.
| Product | Standalone Selling Price | Market Competitor Prices | |
| Bucks | $6,200 | $7,800 | $5,500 |
| Stones | $8,000 | $8,200 | $5,000 |
| Cement | Not available | $4,000 | $2,000 |
How should Sycamore allocate the transaction price to the three products using the adjusted market assessment approach?
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Students have asked these similar questions
19) Hopner Products enters into a contract with Tulles to sell three different products. The total
transaction price is $370,000. Each of the products is a separate performance obligation. Based
on the information presented in the table, what is the allocated transaction price of product Z
using the expected-cost-plus-a-profit margin approach? (Round intermediary percentages to the
nearest hundredth percent, and round your final answer to the nearest whole number.)
Product
X
Y
Z
A) $159,390
B) $94,868
C) $123,333
D) $185,000
Standalone Price
$150,000
$110,000
Not Available
Market Price Forecasted Cost
$130,000
$100,000
$160,000
$85,000
$100,000
$140,000
Cost of trade credit
Firms usually offer their customers some form of trade credit. This allowance comes with certain terms of credit. These terms will affect the cost of the asset for both the buyer and the seller.
Consider the following case:
Blue Elk Manufacturing buys most of its raw materials from a single supplier. This supplier sells to Blue Elk on terms of 2/15, net 45. The cost per period of the trade credit extended to Blue Elk, rounded to two decimal places, is___________%
Blue Elk’s trade credit has a nominal annual cost—expressed as an annual percentage rate (APR)—of_________%, assuming a 365-day year. (Note: Round all intermediate calculations to four decimal places, and your final answer to two decimal places.)
If Blue Elk’s supplier shortens the discount period by five days, this will _____________(Increase or decrease pick one) the cost of the trade credit.
DUDUTLANG produces and sells legitimate drugs. BTC, ADA, AXS and SLP. DUDUTLANG is currently determining the value to be presented in the statement of financial position as of December 31, 2021. The following information were provided by DUDUTLANG:
BTC
ADA
AXS
SLP
Est. Selling Price
P30,000
P110
P7,000
P4
Est. Selling Costs
10,200
50
2,500
1
Est. Costs to Complete
3,000
12
1,200
1
Unit Cost
17,000
45
3,450
2
Units
100
12,000
1,500
200,500
1. How much should be presented as inventory in the statement of financial position as of December 31, 2021?
2. Assuming the Company has P25,000,000 in sales and P19,800,000 in cost of goods sold. How much would be the gross profit if the Company uses the direct method for accounting inventory losses?
Chapter 8 Solutions
Intermediate Accounting
Ch. 8 - What are the primary issues involved in revenue...Ch. 8 - What is the fundamental principle underlying the...Ch. 8 - What is the fundamental principle underlying the...Ch. 8 - Prob. 8.4QCh. 8 - Prob. 8.5QCh. 8 - How is a performance obligation defined?Ch. 8 - What are the two criteria to define a good or...Ch. 8 - Prob. 8.8QCh. 8 - What principles regarding timing and measurement...Ch. 8 - Prob. 8.10Q
Ch. 8 - What is variable consideration and what factors...Ch. 8 - Describe and contrast the two approaches used to...Ch. 8 - Prob. 8.13QCh. 8 - What factors should accountants consider to...Ch. 8 - Prob. 8.15QCh. 8 - How does a seller account for any consideration...Ch. 8 - Prob. 8.17QCh. 8 - What are the two exceptions to the general rule...Ch. 8 - What are the three criteria required to recognize...Ch. 8 - When an entity does not meet the three criteria...Ch. 8 - Prob. 8.21QCh. 8 - Prob. 8.22QCh. 8 - How does a firm estimate the degree completed...Ch. 8 - Can a firm record inventory out on consignment as...Ch. 8 - What method do agents in a transaction use to...Ch. 8 - Prob. 8.26QCh. 8 - What qualitative disclosures do the standards...Ch. 8 - All of the following are elements of a contract...Ch. 8 - Prob. 8.2MCCh. 8 - Telecom Co. enters into a two-year contract with a...Ch. 8 - The transaction price must reflect the time value...Ch. 8 - Prob. 8.5MCCh. 8 - When allocating the transaction price to separate...Ch. 8 - Which of the following indicators is not...Ch. 8 - During Yoar 1 Moriwothor Construction Company...Ch. 8 - All of the following are indicators that the...Ch. 8 - Prob. 8.10MCCh. 8 - Prob. 8.11MCCh. 8 - Identify a Contract with a Customer. Complete the...Ch. 8 - Prob. 8.2BECh. 8 - Identifying Performance Obligations. Perfect Party...Ch. 8 - Identifying Performance Obligations. Perfect Party...Ch. 8 - Estimating Variable Consideration. Gear Garage...Ch. 8 - Estimating Variable Consideration. Using the...Ch. 8 - Estimating Variable Consideration. Sellet...Ch. 8 - Prob. 8.8BECh. 8 - Prob. 8.9BECh. 8 - Allocation of Transaction Price. Martin Software...Ch. 8 - Prob. 8.11BECh. 8 - Allocation of Transaction Price. Sycamore Sidewalk...Ch. 8 - Allocation of Transaction Price. Sycamore enters...Ch. 8 - Prob. 8.14BECh. 8 - Allocation of Transaction Price. Using the...Ch. 8 - When to Recognize Revenue. For each scenario...Ch. 8 - Prob. 8.17BECh. 8 - Prob. 8.18BECh. 8 - Prob. 8.19BECh. 8 - Prob. 8.20BECh. 8 - Sales with the Right of Return. Both incorporated...Ch. 8 - Sales with the Right of Return. Using the...Ch. 8 - Sales Returns. Historically, about 5% or the...Ch. 8 - Sales on Consignment. Hanna Lighting recertify...Ch. 8 - Determining Performance Obligations. Pagit Inc, a...Ch. 8 - Prob. 8.2ECh. 8 - Estimating Variable Consideration. King Rat Pest...Ch. 8 - Prob. 8.4ECh. 8 - Prob. 8.5ECh. 8 - Prob. 8.6ECh. 8 - Allocation of Variable Consideration. Green-Up Inc...Ch. 8 - Allocation of Variable Consideration. Green-Up Inc...Ch. 8 - Prob. 8.9ECh. 8 - Prob. 8.10ECh. 8 - Determination of When to Recognize Revenue. Far...Ch. 8 - Prob. 8.12ECh. 8 - Prob. 8.13ECh. 8 - Prob. 8.14ECh. 8 - Prob. 8.15ECh. 8 - Prob. 8.16ECh. 8 - Prob. 8.17ECh. 8 - Prob. 8.18ECh. 8 - Prob. 8.19ECh. 8 - Other Principal Agent Transactions, Net Revenue...Ch. 8 - Prob. 8.1PCh. 8 - Prob. 8.2PCh. 8 - Prob. 8.3PCh. 8 - Determining When to Recognize Revenue. Megrew...Ch. 8 - Prob. 8.5PCh. 8 - Prob. 8.6PCh. 8 - Prob. 8.7PCh. 8 - Prob. 8.8PCh. 8 - Prob. 8.9PCh. 8 - Prob. 8.10PCh. 8 - Prob. 8.11PCh. 8 - Prob. 1JCCh. 8 - Prob. 1FSACCh. 8 - Prob. 1SSCCh. 8 - Basis for Conclusions Case 1: Control According to...
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