Homework_Chapter_5A - MIT 3211 section IJZI Chapter 5(a)...

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Unformatted text preview: MIT 3211 section IJZI Chapter 5(a) Homework - Microsoft Internet Eleorer MoGraw-Hill's Homework Graded Session Irwin Manager '.'W'1II"°Q.1'““° Tim .mw'il'fli‘m Tim Student '> Anignment 'NEXT JUMP TO vi “GRADE EHELP moons. SAVE A Question 1 of Remaining time: Unlimite How did I dc Question 1: (25 points) E 5-13 Revenue recognition; software L05 Easywrite Sottvvare Company shipped sottware to a customer on July 1, 2006. The arrangement with the customer ako requires the companyto provide tecnnicalsuoport over the next 18 months and to ship an expected sottvvare upgrade on January 1, 200?. The total contract price is $241,000, and Easywrite estimates that the individuai fair values of the components of the arrangement it sold separateiy would be: Software $210,000 Teohnioatsupport 32,000 Upgrade 32,000 % Required: 1. Determine the timing of revenue recognition for the $241,000. 2. Assume that the $241,000 contract price was paid in advance on July 1, 2006. Prepare a journal entry to record the cash receipt. Do not worry about the cost of the items sold. nlII 3211 section 02. Ehapter 5(a) Homework - Microsoft Internet Explorer - 0 fl McGraw-Hill's Mc Homework Graded Session 51'3"" Manager H'" 3'7 I‘ll“‘2 I‘LHW-‘iilmj' “11"”e limitllmj' Student > Assignment bNEXT JUMP TO. vl JGHADE EHELP EQuna SAVE Software $210,000 Technicalsuppor‘t 32.000 Upgrade 32.000 Required: 1. Determine the timing of revenue recognition for the $241,000. 2. Assume that the $241,000 contract price was paid in advance on July 1, 2006. Prepare a journal entry to record the cash receipt. Do hot worry about the cost ofthe items sold. Round answers to the nearest whole number. 1. Revenue should be recognized as follows: Software Idateofshipmentlduly1.2000 ' 3 102000 Technicalsupport Ievenlyover10 mohihsoitheagreemeni ' 3 24100 Q Upgrade date 01 shipment. January 1.2007 ' 5 32000 2. July 1, 2006 To record sale of software ICash 'l 2111000 IRevenue 'I 101130 IUhearhed revenue V 40000 1 IIT 321 1 section 02, Chapter 501) Homework - osoft Internet Explorer _ 5‘ ll McGraw-Hill's Homework Graded Session Irwin Manager 'w'l"'911“"° “Ilimf'.I'L”_'-rh'siw'l"'9£“‘"e Student > Aiilgnment ‘BACK bNEXT JUMP TO '1 ¢GHADE 7’ HELP xcums. SAVE Question 2 of Remaining time: Unlimite How did I dt Question 2: (25 points) E 5-14 Revenue recognition; franchise sales L05 On October 1, 2006, the Submarine Sandwich Company entered into a franchise agreement with an individual. l% ln exchange for an initial franchise Fee of $300,000, Submarine will provide initial services to the franchisee to include assistance in design and construction of the building, help in training employees, help in obtaining financing, and management advice over the first five years of the 107year franchise agreement. 10% of the initial franchise fee is payable on October 1, 2006, with the remaining $270,000 payable in nine equal annual installments beginning on October 1, 2007. These installments will include interest at an appropriate rate. The franchise opened for business on January 15, 2007. Required: Assume that the initialsenrices to be performed by Submarine Sandwich subsequent to October 1, 2006, are substantial and that collectibility of the installment receivable is reasonably certain. Substantial performance of the initial services is deemed to have occurred when the franchise opened. Prepare the necessary journal entries for the following dates [ignoring interest charges]: 1. October 1, 2006 2. January15, 2cm -l_| D III 3211 section 02. Chapter 5(a) Homework Microsoft Internet Eleorer _ 51 5| McGraw-Hill's _ . Homework Graded Sesswn lnmn Manager lemme lemme I‘LH-ifl' Student > Mlignmem 4BACK *NEXT JUMPTO VI “GRADE '-’ HELP xQUITSi SAVE . . _ _ "a, _. ._ Ll 13% of the initial tranchise fee is payable on October 1, EDGE, with the remaining SZFUJUEI payable in nine equal annual installments beginning on October 1, 2001 These installments will include interest at an appropriate rate. The franchise opened for business on January 15, 200?. Required: Assume that the initialsenrices to be performed by Submarine Sandwich subsequent to October 1, ZUEIE, are substantial and that collectibility of the installment receivable is reasonably certain. Substantial performance of the initial services is deemed to have occurred when the franchise opened. Prepare the necessary journal entries for the Following dates [ignoring interest charges]: 1 October1,2006 2i January15,2ElEl? Oclober 1, 2006 To record franchise agreemenl and down payment (Click for Lisi) v [— (Click for List) v [— (Click for List) V I % January 15, 2007 To recognize franchise fee revenue (Click for List) v [— (Click for Lisi) v [— IIT 3211 section 02, apter 5(A) Homework Microsoft Internet Explorer I _ 5‘ ll MeGraw-Hill's Homework Graded Session Irwin Manager '3'1l.”??ll'“"° “Ilimfll'LWWIFTéflmm “Tim Student > Assignment ‘BACK JUMP TO vi ¢GHADE 7’ HELP "QUITa SAVE A Question 3 of Remaining time: Unlimite How did I dt Question 3: (50 points) P 5-3 Installment sales; alternative recognition methods L02 On August 31, 2006, the Silva Company sold merchandise to the Bendix Corporation for $530,000. Terms of the % sale called for a down payment of $106,000 and tour annual installments of $106,000 due on each August 31, beginning August 31, 2007. Each installment aBo will include interest on the unpaid balance applying an appropriate interest rate. The book value of the merchandise on Silva's books on the date of sale was $313,000. The perpetualinventory system is used. The company’s i'iscalyear—end is December 31. Required: 1. Complete the table below by entering the amount of gross profit to he recognized in each of the five years of the installment sale, applying each of the following methods: a. Point of delivery revenue recognition. in. Installment sales method. c. Cost recovery method. 2. Complete the journal entries in the journal below for each of the Five years, applying the three '2 Dranzra a martial haianr-B shhat as nttha anri nF inns anri 7on7 iistinu H19 itims ralztari tn the revenue recognition methods listed in requirement 1. v Li—l III 3211 section 02. Chapter 5(a) Homework Microsoft Internet Eleorer _ 51 5| McGraw-Hill's Homework Graded Session Irwin Manager I'Ql‘l‘m I'Ql‘l‘m Student > Assignment ‘BACK JUMP TO 'I “GRADE '5’ HELP x QUITE: SAVE 5. Cost recovery method. Ll 2. Complete the journal entries in the journal below for each of the Five years, applying the three revenue recognition methods listed in requirement 1. 3. Prepare a partial balance Sheet a; of the end of 2336 and ZDUY, listing the items related to the installment sale applying each qfthe three methods listed in requirement 1. Round all answers to the nearest whole dollar. Leave no cells blank - be certain to enter "IJ" wherever required. Amounts in parenthesis do not require a minus sign. 1. Total gross profit 3 I 8811136 8131107 smma 8.811139 8513‘10 Cash collections 3 I S S I S l S a. Point of delivery methods I S S I S I 5 ll Installment sales methods I S S I S I S c. Cost recovery method 5 I S S I S I S Dninl nF nnliuprv Indallmnnl Salsa f‘nd Horn-nan: —l;l b MIT 321 1 section 02, Chapter 501) Hnmewnrk - Microsoft Internet Explorer _ 5‘ ll McGraw-Hill's Homework Graded Session Irwin Manager 'w'l"'91l“"e “Ilimf'.3';_¥fi7'l"'9fll‘"e Student > Aiiignment ‘BACK JUMPTO 'l ‘fGHADE 1') HELP xQUITE. SAVE Point of Delivery Installment Sales Cost Recovery To record sale on 3J31f06. (Click far List) V I I (Click for List) V I I (Click for List) V I I (Click for List] V I I To record sale on 8(3’If06. (Click for List) VI I I (Click for Lisi) V (Click for List] V Entry made each Aug. 31. (Plirlz Fm | ic-H v I I f 4 D NIT 321 1 section 02. Chapter 5(a) Homework - Microsoft Internet Explorer _ 51 5| McGraw-Hill's Homework Graded Session Irwin Manager . ‘7" I "‘?1l'““° “f I“: I "‘?1l'“"° “f Student > Afiignmam 4BACK JUMP TO 'I JGHADE 7 HELP xQUITE?» SAVE Entry made each Aug. 31. (Click for LIle V I I (Cllck for Llal) VI I I To record gross profit {Entry made each Aug. 31) (Click for List) 7I I I (Cllck for LIle V I I To recordgross profit (Entry made EIETa’Ofi 5t8f31a’07} (Click for List) 'I I I (Cllck for Lile V I I Point of Delivery Inslallmenl Sales Cost Recovery December 31, 2006 MIT 3211 section 02. Chapter 50!) Homework - Microsoft Internet Explorer McGraw-Hill's . MC Homework Graded Sessron Graw Manager H'" . '1'" [film “IKW‘ILI-H‘rfi?" [WW “IKW‘IL'L-H‘r'fl" Student I> Assignment JGHADE EHELP mounasme JUMP TO 'I " BACK Point of Delivery Installment Sales Cost Recou'eryr December 31, 2006 Assets (Click for List] Less: [Ciick for List) v installment receivable, net December 31, IIJIJT Assets 7 (Click for List) v Less: (Ciick for LiSl) installment receivable, net ...
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This note was uploaded on 11/28/2009 for the course BUSINESS acct 3211 taught by Professor Lin during the Winter '09 term at Calhoun Community College.

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Homework_Chapter_5A - MIT 3211 section IJZI Chapter 5(a)...

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