Meeker Inc. trades its used machine for a new model at Grand Inc. The used machine has a book value of $8,000 (original cost of $12,000) and a fair value of $4,000. The new model lists for $15,000. Meeker gives Grand a trade-in allowance of $7,000 for the used machine, $3,000 more than its fair value.
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Meeker Inc. trades its used machine for a new model at Grand Inc. The used machine has a book value of $8,000 (original cost of $12,000) and a fair value of $4,000. The new model lists for $15,000. Meeker gives Grand a trade-in allowance of $7,000 for the used machine, $3,000 more than its fair value.
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- Goodman Company acquired a truck from Harmes Company in exchange for a machine. The exchange is determined to have commercial substance. The machine cost $30,000, has a book value of $6,000, and has a market value of $8,500. The truck has a cost of $12,000 and a book value of $8,000 on Harmes’ books. Goodman agrees to pay $500 to complete the exchange. Required: Prepare journal entries for Goodman and Harmes to record the exchange.Mott Company purchases a machine from Janelle Company. Installation of the machine requires specialized knowledge that Mott Company does not possess. Janelle Company regularly includes installation as part of its sales contracts. The machine has a stand-alone price of $50,000, and the value of the installation is estimated to be $5,000. Mott agrees to purchase the machine for $50,000. How much of the contract price should be allocated to the machine and installation respectively?Goodman Company acquired a truck from Harmes Company in exchange for a machine. The exchange is determined to have commercial substance. The machine cost $30,000, has a book value of $6,000, and has a market value of $8,500. The truck has a cost of $12,000 and a book value of $8,000 on Harmes’ books. Goodman agrees to pay $500 to complete the exchange.
- Leonard Co. sells $600,000 (cost $480,000) of vehicles to a local car dealer, Carlson Inc. The vehicles were ready to go when the contract was signed on May 31, 2021 and title passed to Carlson at that date. Carlson was undergoing a significant renovation to its dealership at the time and as a result, Carlson requested that Leonard retain the vehicles at its warehouse until July 15, 2021. Payment was made in full on June 30, 2021. At what date can Leonard Co. recognize the revenue relating to the sale of the vehicles?A company sells a stove to a customer for a price of $2,000 which includes the installation. The fair value of the installation alone is $300 and the fair value of the stove alone is $1,800. The stove was delivered on October 1, 2020 and the installation occurred on October 15, 2020. The customer pays $1,850 on the date of the delivery and the balance on the date of the installation. What would the journal entry include on the date of the delivery of the stove? a Credit to Revenue of $1,714 a Debit to Unearned Revenue of $136 a Debit to Cash of $2,000 a Credit to Revenue of $1,800 A company sells windows to a customer for a price of $2400 which includes the installation of the windows. The fair value of the installation alone is $500 and the fair value of the Windows alone is $2000. The windows were delivered on September 1, 2020 and the installation occurred on September 15, 2020. What revenue is recorded on September 1? Group of answer choices $2,000 $440 $2,400…Icicle Inc. buys and sells photocopy equipment that are used in businesses across Ontario. The company follow IFS. Unit selling prices range from $10,000 to $100,000. O • Icicle Inc. sells a printing machine to Frosty Inc. on June 14th, 2020. The selling price for the machine is usually $120,000. Icicle Inc. will also install the machine. The estimated fair value of installing the photocopy system is $5,000. Icicle Inc. sold the machine and installation to Frosty Inc. for $122,000. The machine cost Icicle Inc. $58,000. Frosty Inc. is obligated to pay Icicle Inc. $50,000 upon delivery of the machine and the balance on August 15th. O O O O Icicle Inc. delivers the machine on July 1st, 2020, and completes the installation of the machine on July 15th, 2020. On August 15 Frosty Inc. informs Icicle Inc. that they will be not be able to pay their account that is due. The two parties enter into an agreement that the account will be converted into a non-interest bearing promissory note to be…
- Marin Inc. sold $18,000 of its designer tables to Santos Furniture and Design Studios on account. Marin estimates that $1,700 of these sales will either be returned or an allowance will be granted. Prepare the entries when (a) Marin makes the sale (use the gross method), and (b) Marin grants an allowance of $800 when some of the tables do not meet exact specifications but still could be sold by Santos. (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.) No. Account Titles and Explanation Debit Credit (a) (b)Jillian Inc. manufactures and installs customized equipment. On January 1, 2021, Jillian entered into a contract to sell equipment to a client for $800,000. This amount included installation. The company normally charges an additional fee for its installation services, but in this case, the installation was "bundled" with the equipment. The standalone value of the machinery was $750,000 while the cost of the installation was estimated at $100,000. Jillian had the equipment in its inventory on January 1, 2021. The equipment, which had a cost of $600,000, was customized (at no cost Jillan), and delivered to the client and installed on that date. Payment terms are as follows: January 1, 2021: $80,000 upon contract signing and delivery and installation. December 31, 2021; Balance due. Jillian Inc. follows IFRS and estimates that the interest rate for a similar financing arrangement would be 6%. Required: a. Apply the steps of IFRS 15 Revenue Recognition to this transaction. State each step…On March 31, Higgins Repair Service extended an offer of 415, 000.00 for the Lathe Machines that has been priced for sale at P500, 000.00. On April 15, Higgins Repair Service accepted the seller’s counteroffer of P437, 000.00. The fair market value of the Lathe Machines as of November 17 is P475, 000.00. At what value should the machineries be recorded in the Higgins Repair Service? Why?
- Maipao Corporation sells computer software to Mr. Bong. Mr. Bong shall pay P750,000 upfront fee in exchange for the following performance obligations: (1) equipment (2) initial training and (3) five years right over the computer software. The stand-alone selling price of the equipment is P380,000. The stand-alone selling price of the initial training is P280,000. The entity estimates the stand-alone selling price of the five year right over the computer software using the residual approach. On February 1, 20x1, Maipao receive the P150,000 cash and the balance payable in three annual payments beginning January 30, 20x2. Mr. Bong signs a 10% interest bearing for the balance. On August 1, Maipao has already transferred the equipment and conducted the initial training and the software license will commence on the same date. The entity determines that the performance obligations in the contract are distinct. Assume Mr. Bong has the right to use the intellectual property, the total revenue…Holt Industries received a $2,000 prepayment from the Ramirez Company for the sale of new office furniture.Holt will bill Ramirez an additional $3,000 upon delivery of the furniture to Ramirez. Upon receipt of the $2,000prepayment, how much should Holt recognize for a contract asset, a contract liability, and accounts receivable?Maipao Corporation sells computer software to Mr. Bong. Mr. Bong shall pay P750,000 upfront fee in exchange for the following performance obligations: (1) equipment (2) initial training and (3) five years right over the computer software. The stand-alone selling price of the equipment is P380,000. The stand-alone selling price of the initial training is P280,000. The entity estimates the stand-alone selling price of the five year right over the computer software using the residual approach. On February 1, 20x1, Maipao receive the P150,000 cash and the balance payable in three annual payments beginning January 30, 20x2. Mr. Bong signs a 10% interest bearing for the balance. On August 1, Maipao has already transferred the equipment and conducted the initial training and the software license will commence on the same date. The entity determines that the performance obligations in the contract are distinct. The following shall be accounted as part of the consigned inventory of the…
