On March 1, 2021, Gold Examiner receives $150,000 from a local bank and promises to deliver 95 units of certified 1-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 $1,520 per unit, and Gold Examiner estimates the stand-alone price of the replacement insurance service to be $80 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. to 4. Prepare the journal entry Gold Examiner would record on March 1, March 30 and April 1.
On March 1, 2021, Gold Examiner receives $150,000 from a local bank and promises to deliver 95 units of certified 1-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 $1,520 per unit, and Gold Examiner estimates the stand-alone price of the replacement insurance service to be $80 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. to 4. Prepare the journal entry Gold Examiner would record on March 1, March 30 and April 1.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:On March 1, 2021, Gold Examiner receives $150,000 from a local bank and promises to deliver 95 units of certified 1-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 $1,520 per unit, and Gold Examiner estimates the stand-alone price of the replacement
insurance service to be $80 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. to 4. Prepare the journal entry Gold Examiner would record on March 1, March 30 and April 1.
Complete this question by entering your answers in the tabs below.
Req 1
Req 2 to 4
Prepare the journal entry Gold Examiner would record on March 1, March 30 and April 1. (Do not round intermediate calculations. If no
entry is required for a transaction/event, select "No journal entry required" in the first account field.)
View transaction list
Journal entry worksheet
2
Date
March 01,
2021
Record the receipt of cash by Gold Examiner.
3
Note: Enter debits before credits.
Record entry
General Journal
Clear entry
Debit
Credit
View general journal
>
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