Cass Company enters into a contract with Dearborn Inc. to sell it $50,000 of goods with delivery on May 10, 2019. Cass manufactured the goods at a cost of $33,000. The contract is signed on April 15, 2019, at which time Dearborn pays Cass $25,000. Cass delivers the goods on May 10, 2019, and Dearborn pays the final $25,000 on that date. Required: 1. What is the transaction price? 2. Prepare Cass’s journal entries related to the contract with Dearborn.
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Cass Company enters into a contract with Dearborn Inc. to sell it $50,000 of goods with delivery on May 10, 2019. Cass manufactured the goods at a cost of $33,000. The contract is signed on April 15, 2019, at which time Dearborn pays Cass $25,000. Cass delivers the goods on May 10, 2019, and Dearborn pays the final $25,000 on that date.
| 1. | What is the transaction price? |
| 2. | Prepare Cass’s |
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- Rix Company sells home appliances and provides installation and service for its customers. On April 1, 2019, a customer purchased a dishwasher that Rix normally sells for 1,000. In addition, the customer purchased the installation service and a 3-year service contract, with stand-alone selling prices of 200 and 400, respectively. Because the customer purchased all three items as a bundle, Rix charged the customer 1,400. Required: 1. How should the transaction price be allocated among the products? 2. Prepare the journal entries to recognize revenue related to each product in 2019.Zoro Company enters into a contract to sell Product A and Product B on July 1, 2020 for an upfront cash payment of P250,000. Product A will be delivered at the end of the year, and Product B will be delivered the following year. Zoro Company sells Product A for P80,000 and Product B for P240,000. 1. How many performance obligations are there in the contract? 2.what is the transaction price? 3.how much is revenue to be recognized in 2020? 4. how much is revenue to be recognized in 2021?Cass Company enters into a contract with Dearborn Inc. to sell it $50,000 of goods with delivery on May 10, 2019. Cass manufactured the goods at a cost of $33,000. The contract is signed on April 15, 2019, at which time Dearborn pays Cass $25,000. Cass delivers the goods on May 10, 2019, and Dearborn pays the final $25,000 on that date. Required: 1. On what date does a contract exist between Cass and Dearborn? 2. What are Cass’s performance obligations in the contract? 3. What is the transaction price? 4. Does this transaction price need to be allocated? 5. Prepare Cass’s journal entries related to the contract with Dearborn.
- On May 10, 2025, Cullumber Co. enters into a contract to deliver a product to Oriole Inc. on June 15, 2025. Oriole agrees to pay the full contract price of $1,980 on July 15, 2025. The cost of the goods is $1,280. Cullumber delivers the product to Oriole on June 15, 2025, and receives payment on July 15, 2025. Prepare the journal entries for Cullumber related to this contract. Either party may terminate the contract without compensation until one of the parties performs. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No entry" for the account titles and enter O for the amounts. List all debit entries before credit entries. Record journal entries in the order presented in the problem.) Date Account Titles and Explanation Debit Credit SICass Company enters into a contract with Dearborn Inc. to sell it $50,000 of goods with delivery on May 10, 2017. Cass manufactured the goods at a cost of $33,000. The contract is signed on April 15, 2017, at which time Dearborn pays Cass $25,000. Cass delivers the goods on May 10, 2017, and Cass pays the final $25,000 on that date. Required: 1. On what date does a contract exist between Cass and Dearborn? 2. What are Cass's performance obligations in the contract? 3. What is the transaction price? 4. Does this transaction price need to be allocated? 5. Prepare Cass's journal entries related to the contract with Dearborn.A. On January 1, 2020, Machinery Corp. enters into a contract with a customer for the sale of a machine and relatedone-yearmaintenance services for a total contract price of P2,000.000. Machinery Corp. regulariy sells these items separately. If they were to be purchased separately, their stand-alone selling prices are as follows: • P1,800,000 for the machine; and P600,000 for the one-year maintenance services Machinery Corp transfesthe machine, andcolects the total contract price, on February 1, 2020. The maintenance services start on that date. Required: Analyze the five steps of model of revenue recognition.
- On May 10, 2020, Cullumber Co. enters into a contract to deliver a product to Greig Inc. on June 15, 2020. Greig agrees to pay the full contract price of $1,980 on July 15, 2020. The cost of the goods is $1,280. Cullumber delivers the product to Greig on June 15, 2020, and receives payment on July 15, 2020. Prepare the journal entries for Cullumber related to this contract. Either party may terminate the contract without compensation until one of the parties performs.On November 1, 2021, Sunland Farm entered into a contract to buy a $144000 harvester from John Deere. The contract required Sunland Farm to pay $144000 in advance on November 1, 2021. The harvester (cost of $104000) was delivered on November 30, 2021. The journal entry to record the contract on November 1, 2021 includes a credit to Sales Revenue for $144000. debit to Unearned Sales Revenue for $144000. credit to Unearned Sales Revenue for $144000. credit to Accounts Receivable for $144000.On May 1, 2020, Mount Company enters into a contract to transfer a product to Eric Company on September 30, 2020. It is agreed that Eric will pay the full price of $25,000 in advance on June 15, 2020. Eric pays on June 15, 2020, and Mount delivers the product on September 30, 2020. Prepare the journal entries required for Mount in 2020.
- A On January 1. 2020. Machinery Corp. enters into a contract with a customer for the sale of a machine and related one year maintenance services for a total contract price of P2000.000. Machinery Corp. regularly sells these items separately. If they were to be purchased separately, their stand-alone selling prices are as follows: P1.800.000 for the machines and P600.000 for the one-year maintenance services Machinery Corp transfers the machine, and collects the total contract price on February 1, 2020 The maintenance services start on that date. Required Analyze the five steps of model of revenue recognition1. Assume the note indicates that Seneca is to pay Arctic the $43,500 due on the note on December 31, 2021. Prepare the journal entry for Arctic to record the sale on January 1, 2021. 2. Assume the same facts as in requirement 1, and prepare the journal entry for Arctic to record collection of the payment on December 31, 2021. 3. Assume instead that Seneca is to pay Arctic the $43,500 due on the note on December 31, 2022. Prepare the journal entry for Arctic to record the sale on January 1, 2021. 4. Assume instead that Arctic does not view the time value of money component of this arrangement to be significant, and that the note indicates that Seneca is to pay Arctic the $43,500 due on the note on December 31, 2021. Prepare the journal entry for Arctic to record the sale on January 1, 2021. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field. Round your final answers to the nearest whole dollar amount.) X Answer is complete…On May 10, 2020, Marigold Co. enters into a contract to deliver a product to Greig Inc. on June 15, 2020. Greig agrees to pay the full contract price of $1,890 on July 15, 2020. The cost of the goods is $1,170. Marigold delivers the product to Greig on June 15, 2020, and receives payment on July 15, 2020. Prepare the journal entries for Marigold related to this contract. Either party may terminate the contract without compensation until one of the parties performs. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No entry" for the account titles and enter 0 for the amounts.) Date Account Titles and Explanation Debit Credit choose a transaction date May 10, 2020Jun. 15, 2020Jul. 15, 2020 enter an account title to record contract entered into enter a debit amount enter a credit amount enter an account title to record…