Chpt_18_Solutions 12edi - 3 Revenues are recognized...

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3. Revenues are recognized generally as follows: (a) Revenue from selling products—date of delivery to customers. (b) Revenue from services rendered—when the services have been performed and are billable. (c) Revenue from permitting others to use enterprise assets—as time passes or as the assets are used. (d) Revenue from disposing of assets other than products—at the date of sale. EXERCISE 18-2 (15–20 minutes) (a) (1) 6/3 Accounts Receivable—Kim Rhode. .. 5,000 Sales. .......................................... 5,000 6/5 Sales Returns and Allowances. .................. 400 Accounts Receivable—Kim Rhode. .... 400 6/7 Transportation-Out. ...................................... 24 Cash. ....................................................... 24 6/12 Cash. .............................................................. 4,508 Sales Discounts (2% X $4,600). ................... 92 Accounts Receivable—Kim Rhode. .... 4,600 (2) 6/3 Accounts Receivable—Kim Rhode. ............ 4,900 Sales [$5,000 – (2% X $5,000)]. ............ 4,900 6/5 Sales Returns and Allowances. .................. 392 Accounts Receivable—Kim Rhode. .... 392 [$400 – (2% x $400)] 6/7 Transportation-Out. ...................................... 24 Cash. ....................................................... 24 6/12 Cash. .............................................................. 4,508 Accounts Receivable—Kim Rhode. .... 4,508 (b) 8/5 Cash. .............................................................. 4,600
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Accounts Receivable—Kim Rhode. .... 4,508 Sales Discounts Forfeited. ................... 92 (2% X $4,600) PROBLEM 18-7 (a) Computation of Recognizable Profit/Loss Percentage-of-Completion Method 2007 Costs to date (12/31/07) $ 150,000 Estimated costs to complete 1,350,000 Estimated total costs $1,500,000 Percent complete ($150,000 ÷ $1,500,000) 10% Revenue recognized ($1,950,000 X 10%) $ 195,000 Costs incurred 150,000 Profit recognized in 2007 $ 45,000 2008 Costs to date (12/31/08)
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This note was uploaded on 11/12/2011 for the course ACCT 2015 taught by Professor Dr,moore during the Spring '10 term at University of the West Indies at Mona.

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Chpt_18_Solutions 12edi - 3 Revenues are recognized...

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