E18-9 (Allocate Transaction Price) Sanchez Co. enters into a contract to sell Product A and Product B on January 2, 2015, for an upfront cash payment of R$150,000. Product A will be delivered in 2 years (January 2, 2017) and Product B will be delivered in 5 years (January 2, 2020). Sanchez Co. allocates the R$150,000 to Products A and B on a relative standalone selling price basis as follows. Product A Product B Standalone Selling Prices R$ 40,000 120,000 R$160,000 Percent Allocated 25% 75% Allocated Amounts R$ 37,500 112,500 R$150,000 Sanchez Co. uses an interest rate of 6%, which is its incremental borrowing rate. Instructions (a) Prepare the journal entries necessary on January 2, 2015, and December 31, 2015. (b) Prepare the journal entries necessary on December 31, 2016. (c) Prepare the journal entries necessary on January 2, 2017.

E18-9 (Allocate Transaction Price) Sanchez Co. enters into a contract to sell Product A and Product B on January 2, 2015, for an upfront cash payment of R$150,000. Product A will be delivered in 2 years (January 2, 2017) and Product B will be delivered in 5 years (January 2, 2020). Sanchez Co. allocates the R$150,000 to Products A and B on a relative standalone selling price basis as follows. Product A Product B Standalone Selling Prices R$ 40,000 120,000 R$160,000 Percent Allocated 25% 75% Allocated Amounts R$ 37,500 112,500 R$150,000 Sanchez Co. uses an interest rate of 6%, which is its incremental borrowing rate. Instructions (a) Prepare the journal entries necessary on January 2, 2015, and December 31, 2015. (b) Prepare the journal entries necessary on December 31, 2016. (c) Prepare the journal entries necessary on January 2, 2017.

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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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?
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.
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 recognition
Sanchez Co. enters into a contract to sell Product A and Product B on January 2, 20x5, for an upfront cash payment of 300,000. Product A will be delivered in 2 years (January 2, 20x7) and Product B will be delivered in 5 years (January 2, 2020). Sanchez Co. allocates the 300,000 to Products A and B on a relative standalone selling price basis as follows. Standalone Selling Price Percent Allocated Allocated Amount Product A 80,000 25% 75,000 Product B 240,000 75% 225,000 320,000 300,000 Sanchez Co. uses an interest rate of 6%, which is its incremental borrowing rate.INSTRUCTIONS1. (a) Prepare the journal entries necessary on January 2, 20x5, and December 31, 20x52. (b) Prepare the journal entries necessary on December 21, 20x6.3. (c) Prepare the journal entries necessary on January 2, 20x7
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1. On January 1, 2015, Betilapeya Company purchased a specialized machinery with a cash equivalent price of P59, 737. Betilapeya signed a deferred payment contract that calls for P10 000 down payment and a three-year note for P49 737. The note is payable in 3 equal annual payments of P20 000 beginning December 21, 2015. The annual payment includes 10% interest. How much is the interest expense for the year ended December 31, 2015? _____ How much is the carrying amount of the note payable at December 31, 2015? _____
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(Allocate Transaction Price) Shaw Company sells goods that cost $300,000 to Ricard Company for $410,000 on January 2, 2017. The sales price includes an installation fee, which has a standalone selling price of $40,000. The standalone selling price of the goods is $370,000. The installation is considered a separate performance obligation and is expected to take6 months to complete.Instructions(a) Prepare the journal entries (if any) to record the sale on January 2, 2017.(b) Shaw prepares an income statement for the first quarter of 2017, ending on March 31, 2017 (installation was completed on June 18, 2017). How much revenue should Shaw recognize related to its sale to Ricard?
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