17) Meyer & smith is a full-service company. They provide equipment, installation services as well as a full year of technical support. Customers can purchase any product or services separately or as a bundles package. Container Corporation purchase computer equipment, installation, and 12 months of technical support for a total cost of $144,000 on March 15, 2024. Estimated standalone selling price of the equipment, installation and technical support are $90,000, $60,000, and $30,000 respectively. The journal entry to record the transaction on March 15,2024 will include a A) credit to service revenue of $60,000 B) credit to Sales Revenue for $144,000 INCORRECT C) credit to unearned service revenue $ 24,000 D) debit to unearned service revenue
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- For each unit of computer sold, Blue Company sells a service contract. The contract provides that the computers sold will be repaired by the company within a period of three years from the date of sale. Based on company’s experience, 10% of repairs are done in the 1st year from the date of sale, 30% in the 2nd year and 60% in the 3rd year. Sale of service contracts for the year 2019, 2020 and 2021 are; P500,000; P600,000 and P700,000 respectively. Sale of service contracts and repairs are made evenly throughout the year. How much is the unearned service contract revenue at December 31, 2021?Commonly Corp. agrees to sell 100 of its products to M&H Co. for P30, 000 in August 2021. (P300 per product). Over the following six months, M&H will get the goods. The contract is updated after 60 items have been delivered, and Communion agrees to supply 80 more items for an extra P21, 600 (P270 per station) 90 more goods were supplied by commonly towards the conclusion of the year. Every sale is cash-on-delivery. Assume that the extra clause represents a potential amendment to the original contract. What annual income will be reported on the contract?Value Dealership Inc. markets and sells the vehicles to retail customers. Along with a new vehicle purchase, a customer will receive a free annual maintenance contract for one year from the date of purchase. The standalone selling price of a vehicle is $30,000 and the standalone selling price for the annual maintenance contract is $500. During October 2020, Value Dealership Inc. sold 72 vehicles for $30,250 per vehicle, each with a free annual maintenance contract. Note: Carry all decimals in calculations; round the final answer to the nearest dollar. a.) Ignoring the cost entries, record the journal entry in October 2020 for Value Dealership’s sale of vehicles with the associated maintenance contracts to customers. b.) Assume the same information above except that the standalone selling price of the annual maintenance contract is not known because this was the first time Value Dealership offered the service. Value Dealership is uncertain as to what services, on average, a customer…
- Situation 2: Malcolm Limited acquired a truck to deliver and install its specialized products at the customer's site. The vehicle's list price was $135,000, but customization added another $30,000 in costs. Malcolm took delivery of the truck on September 30, 2020, with a down payment of $15,000, signing a four-year, 8.0% note for the remainder, payable in equal payments of $43,488 beginning September 30, 2021. Malcolm expected the truck to be usable for 500 deliveries and installations. After that, the product's technology would have changed and made the vehicle obsolete. In late July 2023, the truck was destroyed when a concrete garage collapsed. Malcolm used the truck for 45 deliveries in 2020, 125 in 2021, 134 in 2022, and 79 in 2023. The company received a cheque for $12,000 from the insurance company and paid what remained on the note. Required #2: Prepare all entries that are needed to record the events and activities related to the truck, the note, and its interest, including…Sarasota Company sells goods that cost $324,000 to Ricard Company for $442,800 on January 2, 2025. The sales price includes an installation fee, which has a stand-alone selling price of $43,200. The standalone selling price of the goods is $399,600. The installation is considered a separate performance obligation and is expected to take 6 months to complete (installation was completed on June 18, 2025). (a) How much revenue does Sarasota record on January 2, 2025? Revenue $Elegance Esthetics Wholesalers Corporation sells various esthetics treatment tools, esthetic and spa supplies. In 2020, Elegance Esthetics signed a two-year contract with Saskatoon College to supply it with 100 esthetic tool and product kits for students in the college's esthetics program for each academic semester. The value of the contract is $231,600 based on four academic semesters over the two-year period. The kits are sold for $579 each. The cost of the kits is $472 each. The college can return any unsold kits to the company and Elegance estimates a return rate of 3%. Because the kits involve esthetic supplies and could potentially be contaminated, returned kits need to be scrapped and cannot be resold. Elegance shipped 100 kits for the September 2020 semester, 100 kits in January 2021 semester and another 100 kits in September 2021 semester. The kits are invoiced as soon as they are shipped (at the beginning of each semester) and payment is required within 30 days. The college…
- ANGEL Company has purchased raw materials amounting to P800,000 from its major supplier on February 14, 2018. The credit terms given to ANGEL were: 3/20 net 60. ANGEL. operates 360 days a year. Three days after the purchase, the supplier is offering ANGEL new credit terms of 2/10 net 30 for the purchase transaction. The supplier is giving ANGEL the choice between the old credit terms of 3/20, net 60, and the new credit term of 2/10 net 30. 1. Which credit terms should be chosen by ANGEL Company assuming cash discount will not be taken, or payment will be made on the last day of the credit term? Discuss your answer briefly. 2. Based on the answer in item number 3 and assuming that the prevailing interest rate of banks is 20\%, compute the net monetary benefits that ANGEL will enjoy when she takes the cash discount by paying within the discount period, and making use of bank borrowing as source of funds for the remaining 40 days.Commando Corp. agrees to sell 100 of its products to M&H Co. for P30,000 in August 2021. (P300 per product). The goods will be delivered to M&H over the following six months. The contract is updated after 60 merchandises are supplied, and Common offers to provide 80 more things for an extra P21,600 (P270 per station). Commonlo provided an extra 90 goods at the end of the year. All sales are made in cash upon delivery. Consider that the added term is a potential change to the original contract. That however much income will be recognised under the contract in 2021?In August 2020, Atlantic Corp, commits to selling 100 of its merchandise to Boy Co. for P30,000 (P300 per product). The merchandise is to be delivered to Boy over the next 6 months. After 60 mierchandises were delivered, the contract is modified and Commonio promises to deliver 80 more products for an additional P21,600 (P270 per station). At year-end, Atlantic delivered an additional 90 products. All sales are cash on delivery Assume that the additional terms anpective modification to the original contract. How much revenue will be recognized on the contract for the year 2020?
- ANGEL Company has purchased raw materials amounting to P800,000 from its major supplier on February 14, 2018. The credit terms given to ANGEL were: 3/20 net 60. ANGEL. operates 360 days a year. Three days after the purchase, the supplier is offering ANGEL new credit terms of 2/10 net 30 for the purchase transaction. The supplier is giving ANGEL the choice between the old credit terms of 3/20, net 60, and the new credit term of 2/10 net 30. 1. Compute the cost of the supplier's trade credit of the two terms. 2. Compute the effective cost of credit of the two credit terms. 3. Which credit terms should be chosen by ANGEL Company assuming cash discount will not be taken, or payment will be made on the last day of the credit term? Discuss your answer briefly. 4. Based on the answer in item number 3 and assuming that the prevailing interest rate of banks is 20\%, compute the net monetary benefits that ANGEL will enjoy when she takes the cash discount by paying within the discount period, and…Novak Corp. offers its customers a 5-piece knife set in exchange for $9 and the purchase of its CC Cookware set. The company purchased 2,850 units of the 5-piece knife sets at $15 each. It estimates that 70% of customers will participate in the promotion and that 5% of the amount received from customers relates to the awarded premiums. In 2024, the company sold 4,020 cookware sets at a sales price of $116 resulting in sales revenue of $466,320. By the end of the year, 2,330 customers took advantage of the promotion. Prepare the appropriate journal entries assuming Novak follows IFRS and uses the revenue approach. Ignore any cost of goods sold entry. (Do not round intermediate calculations. Round answers to 0 decimal places, e.g. 5,125. Credit account titles are automatically indented when the amount is entered. Do not indent manually. List all debit entries before credit entries. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts.) Account…In September 2020, Gaertner Corp. commits to selling 150 of its iPhone-compatible docking stations to Better Buy Co. for $15,000 ($100 per product). The stations are delivered to Better Buy over the next 6 months. After 90 stations are delivered, the contract is modified and Gaertner promises to deliver an additional 45 products for an additional $4,275 ($95 per station). All sales are cash on delivery. Instructions a. Prepare the journal entry for Gaertner for the sale of the first 90 stations. The cost of each station is $54. b. Prepare the journal entry for the sale of 10 more stations after the contract modification, assuming that the price for the additional stations reflects the standalone selling price at the time of the contract modification. In addition, the additional stations are distinct from the original products as Gaertner regularly sells the products separately. c. Prepare the journal entry for the sale of 10 more stations (as in (b)), assuming that the pricing…