The revenue recognition principle:
The revenue recognition principle refers to the revenue that should be recognized in the time period, when the performance obligation (sales or services) of the company is completed.
Deferred revenues:
Collection of cash in advance to render service or to deliver goods in future is known as unearned revenues. These unearned revenues are considered as liabilities until they are earned. For the portion of rendered services or delivered goods, revenues would be recognized by way of passing an
To calculate: The value of the revenue for Company VTS.
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Intermediate Accounting
- LO.2 Oak Corporation has the following general business credit carryovers. If the general business credit generated by activities during 2019 equals 36,000 and the total credit allowed during the current year is 60,000 (based on tax liability), what amounts of the current general business credit and carryovers are utilized against the 2019 income tax liability? What is the amount of unused credit carried forward to 2020?arrow_forwardExercise 5-16 (Static) Deferred annuities [LO5 - 8] President Company purchased merchandise from Captain Corporation on September 30, 2024. Payment was made in the form of a noninterest - bearing note requiring President to make six annual payments of $5,000 on each September 30, beginning on September 30, 2027. Required: Calculate the amount at which President should record the note payable and corresponding purchase on September 30, 2024, assuming that an interest rate of 10% properly reflects the time value of money in this situation. Note: Use tables, Excel, or a financial calculator. Round your final answers to nearest whole dollar amount. Round your intermediate calculations to the nearest whole dollar. (FV of $1, PV of $1, FVA of $1, PVA of $1, FVAD of $1 and PVAD of $1)arrow_forwardExercise 5-16 (Algo) Deferred annuities [LO5-8] President Company purchased merchandise from Captain Corporation on September 30, 2024. Payment was made in the form of a noninterest-bearing note requiring President to make six annual payments of $5,200 on each September 30, beginning on September 30, 2027. Required: Calculate the amount at which President should record the note payable and corresponding purchase on September 30, 2024, assuming that an interest rate of 11% properly reflects the time value of money in this situation. Note: Use tables, Excel, or a financial calculator. Round your final answers to nearest whole dollar amount. Round your intermediate calculations to the nearest whole dollar. (FV of $1, PV of $1, FVA of $1, PVA of $1, FVAD of $1 and PVAD of $1) Amount recorded:arrow_forward
- Question 2 of 4 > -/2 View Policies Current Attempt in Progress At the end of 2020, Crown Point Corp. has accounts receivable of $479,200 and an allowance for doubtful accounts of $30,300. On January 24, 2021, Crown Point learns that its $11,600 receivable from Hutley Inc. is not collectible. Management authorizes a write off. But on March 4, 2021, Crown Point Corp. receives payment in full of $11,600 from Hutley Inc. after the write off. Prepare the required journal entries to record this transaction. (List all debit entries before credit entries. 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.) Date Account Titles and Explanation Debit Credit Mar. 4 (To reverse write off of account receivable) Mar. 4 (To record collection of account receivable) eTextbook and Media List of Accounts IIarrow_forwardLO6-4,LO6-5 E 6-5 Performance obligations LO6–2, On March 1, 2024, Gold Examiner receives $147,000 from a local bank and promises to deliver 100 units of certified l-oz. gold bars on a future date. The contract states that ownership passes to the bank when Gold Examiner delivers the products to Brink's, a third-party carrier. In addition, Gold Examiner has agreed to provide a replacement shipment at no additional cost if the product is lost in transit. The stand-alone price of a gold bar is $1,440 per unit, and Gold Examiner estimates the stand-alone price of the replacement insurance service to be $60 per unit. Brink's picked up the gold bars from Gold Examiner on March 30, and delivery to the bank occurred on April 1. Required: 1. How many performance obligations are in this contract? 2. Prepare the journal entry Gold Examiner would record on March 1. 3. Prepare the journal entry Gold Examiner would record on March 30. 4. Prepare the journal entry Gold Examiner would record on April…arrow_forward2022 SP CSR342 Week 6 Assignment Assignment 1. A. John will purchase Equinox EV ($35,000). John's credit score (FICO® Score) is 750. Based on the credit score, John can get 60 months auto-loan from WL Land Bank with 4.0% APR. John will pay the down payment as much as $5,000. B. Smith will purchase Equinox EV ($35,000). Smith's credit score (FICO Score) is 625. Based on the credit score, Smith can get 60 months auto-loan from WL Land Bank with 6.5% APR. Smith will pay the down payment as much as $5,000. [1] Explain who will pay more and how much pay more [no word limit] Correct answer existed but close answer will be considered as good; file on Brightspace (Excel WorkSheet 6.8). To compare John and Smith's cases, utilize the exc Even if it is named as mortgage amortization table, the auto payment (amortization plan) is totally same. Your answer should be like "John will pay less/more than Smith $-- per a month."arrow_forward
- IFRS 15 Revenue from Contracts with Customers requires strict recognition standards for revenue. Which of the following is correct for recognising revenue? A The sales of $1 million from Alby Co which comes from the repurchase agreement with its customer Bully Co. It is probable that Alby would repurchase the goods from Bully Co. B The sales of $200,000 from Cello Co acting as an agent for Dean Co. D The sales of $10,000 from Elegant Co to the distributer Fusion Co. The Elegant Co remains the ability to direct the use of the asset, and obtains substantially all of the remaining benefits from the asset. Giant Co recognised the revenue of $173,554 for the sale of goods on 1 January 20X7. The amount is due for settlement for the two equal instalments of $100,000 on 1 January 20X8 and 1 January 20X9. The cost of capital of 10%.arrow_forwardEXERCISE I5 Lincoln Company sells its products in returnable containers.The customers are given a period of 2 years from the year of delivery to return the containers. Containers not returned within the prescribed period are considered sold at the amount of deposits forfeited. At January 1,2020, the balance of the account Refundable Deposits on Returnable Containers is P 250,000, consisting of the following: For containers delivered to customers in : 2018 P 100,000 2019 150,000 During 2020, the company received additional deposits of P 200,000 for containers delivered to customers during 2020 for return of containers amounted to P 267,000,as follows: Deliveries in 2018 P 82,000 Deliveries in 2019 T10,000 Deliveries in 2020 75,000 REQUIRED: Compute the balance of Refundable Deposits for Returnable Containers at December 31,2020.arrow_forwardProblem 16-1 (Static) Single temporary difference originates each year for four years [LO16-2] Alsup Consulting sometimes performs services for which it receives payment at the conclusion of the engagement, up to six months after services commence. Alsup recognizes service revenue for financial reporting purposes when the services are performed. For tax purposes, revenue is reported when fees are collected. Service revenue, collections, and pretax accounting income for 2023-2026 are as follows: Pretax Accounting Service Revenue Collections Income 2023 $ 660,000 $ 620,000 $ 186,000 2024 2025 750,000 778,000 260,000 710,000 2026 716,000 702,000 720,000 228,000 200,000 There are no differences between accounting income and taxable income other than the temporary difference described above. The enacted tax rate for each year is 25%. (Hint: You will find it helpful to prepare a schedule that shows the balances in service revenue receivable at December 31, 2023- 2026.) Required: 1. to 3.…arrow_forward
- Exercise 5-16 (Algo) Deferred annuities [LO5-8] President Company purchased merchandise from Captain Corporation on September 30, 2024. Payment was made in the form of a noninterest-bearing note requiring President to make six annual payments of $7,800 on each September 30, beginning on September 30, 2027. Required: Calculate the amount at which President should record the note payable and corresponding purchase on September 30, 2024, assuming that an interest rate of 9% properly reflects the time value of money in this situation. Note: Use tables, Excel, or a financial calculator. Round your final answers to nearest whole dollar amount. Round your intermediate calculations to the nearest whole dollar. (FV of $1, PV of $1, FVA of $1, PVA ofarrow_forwardExercise 5-16 (Algo) Deferred annuities [LO5-8] President Company purchased merchandise from Captain Corporation on September 30, 2024. Payment was made in the form of a noninterest-bearing note requiring President to make six annual payments of $8,000 on each September 30, beginning on September 30, 2027. Required: Calculate the amount at which President should record the note payable and corresponding purchase on September 30, 2024, assuming that an interest rate of 12% properly reflects the time value of money in this situation. Note: Use tables, Excel, or a financial calculator. Round your final answers to nearest whole dollar amount. Round your intermediate calculations to the nearest whole dollar. (FV of $1. PV of $1. FVA of $1. PVA of $1. FVAD of $1 and PVAD of $1) Answer is complete but not entirely correct. Amount recorded 33,645arrow_forwardRequired information Exercise 5-22 (Algo) Prepaid expenses-rent LO 5-10 [The following information applies to the questions displayed below] On November 1, 2022, Wenger Company paid its landlord $3,780 in cash as an advance rent payment on its store location. The six-month lease period ends on April 30, 2023, at which time the contract may be renewed. Exercise 5-22 (Algo) Part d d. If the advance payment made on November 1, 2022, had covered an 18-month lease period at the same amount of rent per month, how should Wenger Company report the prepaid amount on its December 31, 2022, balance sheet? Non-current asset Current asset $ $ 840 2,520arrow_forward
- Individual Income TaxesAccountingISBN:9780357109731Author:HoffmanPublisher:CENGAGE LEARNING - CONSIGNMENT