Intermediate Accounting, Student Value Edition Plus MyLab Accounting with Pearson eText -- Access Card Package (2nd Edition)
2nd Edition
ISBN: 9780134833118
Author: Elizabeth A. Gordon, Jana S. Raedy, Alexander J. Sannella
Publisher: PEARSON
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Textbook Question
Chapter 8, Problem
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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Selected comparative financial statements of Korbin Company follow.
Sales
KORBIN COMPANY
Comparative Income Statements
For Years Ended December 31
2021
2020
$ 512,008 $ 392,240
2019
$ 272,200
Cost of goods sold
308,229
245,542
174,208
Gross profit
203,779
146,698
97,992
Selling expenses
72,705
54,129
35,930
Administrative expenses
46,081
34,517
22,593
Total expenses
118,786
88,646
58,523
Income before taxes
.84,993
58,052
39,469
Income tax expense
15,809
11,901
8,012
Net income
$ 69,184
$ 46,151
$ 31,457
KORBIN COMPANY
Comparative Balance Sheets
Assets
Current assets
Long-term investments
Plant assets, net
Total assets
Liabilities and Equity
Current liabilities
Common stock
Other paid-in capital
Retained earnings
December 31
2021
2020
2019
$ 54,370
0
$ 36,390
600
$ 48,645
3,870
99,436
90,776
53,339
Total liabilities and equity
$ 153,806 $ 127,766 $ 105,854
$ 22,456 $ 19,037
$ 18,524
68,000
68,000
50,000
8,500
8,500
5,556
54,850
32,229
31,774
$ 153,806 $ 127,766 $ 105,854
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Chapter 8 Solutions
Intermediate Accounting, Student Value Edition Plus MyLab Accounting with Pearson eText -- Access Card Package (2nd Edition)
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 - Estimating Variable Consideration. Seliet...Ch. 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 - Percentage-of-Completion Method, Journal Entries....Ch. 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 - Percentage-of-Completion Method. Gary Construction...Ch. 8 - Prob. 8.14ECh. 8 - Prob. 8.15ECh. 8 - Prob. 8.16ECh. 8 - Sales with the Right of Return. Webster Hall, Inc....Ch. 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 - Comprehensive Revenue Recognition Problem. Casale...Ch. 8 - Prob. 8.4PCh. 8 - Determining When to Recognize Revenue. Megrew...Ch. 8 - Prob. 8.6PCh. 8 - Prob. 8.7PCh. 8 - Prob. 8.8PCh. 8 - Percentage-of-Completion Method. R Wayne Computer...Ch. 8 - Prob. 8.10PCh. 8 - Prob. 8.11PCh. 8 - Sales on Consignment. Pablo Products. Ltd sells...Ch. 8 - Prob. 1JCCh. 8 - Prob. 1FSCCh. 8 - Prob. 1SSCCh. 8 - Basis for Conclusions Case 1: Control According to...
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