A sales associate presents an owner with an offer for $175,000 on behalf of a buyer. The owner countered at $185,000. While the buyers are considering their response, the owner sends an email rescinding the counteroffer. Which of the following statements is correct?
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- a. Innotech Apps Berhad entered two contracts on the same date with Advance Cool Corporation. Innotech Apps has provided the following analysis of price and cost for the contracts: Contract price Cost of related goods Gross profit (loss) Helixx Primaxx RM 250,000 RM 275,000 175,000 215,000 65,000 75,000 RM RM Advance Cool, the customer, may cancel both contracts if either of them is not fulfilled by Innotech Apps in a timely manner. Stand-alone prices are typically RM275,000 for the goods in Helixx and RM 300,000 for the goods in Primaxx. i. Should the two contracts be combined for purposes of applying the five-step revenue recognition model? Why? Calculate the transaction price? ii. Calculate amount of revenue should Innotech Apps Berhad associate with each of the contracts? iii. Explain when should revenue be recognized on each of the contracts?According to the ideas behind the revenue recognition standard of the FASB, when a seller enters into a contract with a buyer, the seller accepts certain performance obligations in exchange for the promise of receiving assets from the buyer. Under this standard, when does the seller RECOGNIZE REVENUE? When the seller enters into a contract with the buyer When the seller satisfies a performance obligation to the buyer When the seller spends 50 percent or more of the cash needed to serve the buyer When the seller collects cash from the buyerONE Computer Solution (“ONE") provides IT solutions to corporate clients. ONE offered a price of $2,400 to Client A if he purchases an accounting software from them and choose them to do the installation. Client A agreed and entered into a contract with ONE on 1 January 2022. ONE normally charges clients $2,000 as a standalone selling price for acquiring the accounting software, at a cost of $1,100. The installation service has a standalone selling price of $500. Client A paid ONE $2,000 upon delivery and the remaining balance upon installation of the software. The accounting software was delivered on 1 February 2022. ONE completed installation on 1 March 2022 and client A paid the balance due. Required: (a) Allocate the transaction price between the accounting software and installation service. (b) Prepare the journal entries on the following date (Note: If no entry is required, state “no entry" and write down the reason to support your answer): (i) 1 January 2022. (ii) 1 February…
- 5. MASAKIT SA BUNGO CORPORATION operates a customer loyalty program. The entity grants loyalty points for goods purchased. The loyalty points can be used by the customers in exchange for goods of the entity. The points have no expiry date. During 2019, the entity issued 50,000 award credits. The fair value of the award credits is reliably measured at P2,000,000. In 2019, the entity sold goods to customers for a total consideration of P9,000,000 including the fair value of the award credits. The total award credits expected to be redeemed are 80% in 2019 and 85% in 2020. The award credits actually redeemed are 15,000 in 2019 and 7,950 in 2020. What is the revenue earned from points in 202O? * a. P600,000 b. P750,000 c. P330,000 d. P318,000A North Carolina broker obtains a 120 day listing for $150,000 on a property. Shortly thereafter, the broker is working with a buyer as a seller's subagent and obtains an offer from the buyer for $140,000 The buyer informs the broker that if the seller will not accept the offer, he will probably increase his offer by $3,000, but not to tell the seller. When presenting the offer, the broker should A.comply with the buyer's request. B.advise the seller to accept the offer for $140,000. C.tell the seller exactly what the buyer said. D.mention the buyers willingness to pay more only it the seller is dissatisfied with the $140.000 offerBonnie Corp. sells a machine to a customer for $18,000 and uses the Installment Sales Method to account for the sale. The cost of the goods was $12,400. At the date of sale, Bonnie delivers the machine and receives $4,500, with the remainder being an installment account receivable for $13,500. How much gross profit should Bonnie recognize at the date of delivery? Do not use commas, dollar symbols (e.g. $), units or spaces in your answers. For example, one thousand five hundred and twenty-three dollars should be entered as 1523. If the Canvas system inserts a comma for you, don't worry about it.
- a. State how revenue should be recognized for PT. Kamaris PT. Kamaris has sold an electronic equipment on credit to PT Kelelawar. PT Kelelawar would use the equipment if it successfully secure a contract to sell goods to Highlander Co. PT Kamaris has agreed that the machine may be returned at 90% of the price, if PT Kelelawar fails to secure a contract with Highlander Co. b. State how revenue should be recognized for PT. Kamaros PT Kamaros is about to sell a new type of machine that can produce cakes with better quality. Since customer demand is relatively high, Kamaros is taking advance against orders from their customers. The selling price is Rp85,000,0000 per unit and so far 150 customers have paid the initial 30% non-refundable deposit.Company X orders raw materials for EUR 1,000 and manages to obtain a discount of 15% from one of its suppliers. Once raw materials are received, defaults are noted by the warehouse manager. Company X intends a lawsuit against its supplier. Company C's lawyer estimates that Company C might be entitled to receive EUR 200. Decision from the court: the supplier needs to grant a rebate of EUR 150. Prepare the accounting journal entries for the purchase, for the suit and the rebate at the level of Company C.Shawn Company sells gift certificates worth P8,000,000 to customers in exchange for future delivery of its product. The gift certificates are nonrefundable by the customer and the entity expects that 15% of the gift certificates will not be redeemed. During the current year, the entity redeemed gift certificates worth P2,975,000. Required: 1. Compute the expected value of breakage. 2. Compute the expected value of gift certificates to be redeemed. 3. Compute the breakage revenue. 4. Prepare the journal entries to record the sale of gift certificates and the redemption of gift certificates.
- FX Bank has succeeded in hiring ace foreign exchange trader Coral Gables. Her remuneration package includes an annual bonus of 20% of the profits that she generates in excess of $100 million. Write down the expression for the bonus contract of Ms. Gables (one line). What kind of incentive does it provide in terms of Ms. Gables exerting efforts? (no more than three lines) Edit View Insert Format Tools Table 12pt V Paragraph V | BI U Α AV 2 T² v ca • . స | :Which of the following contracts is not covered by statute of fraud? A. Executory contract of lease of land for a term of two years at monthly B. Executory contract of sale of cellphone at a selling price of P500 C. Executory contract of sale of house at a selling price of P400 D. Executory contract for a piece of work of furniture at a contract price of P1,000Firms usually offer their customers some form of trade credit. This allowance comes with certain terms of credit. These terms will affect the cost of the asset for both the buyer and the seller. Consider the following case: Tasty Tuna Corporation buys on terms of 3/15, net 45 from its principal supplier. If Tasty Tuna receives an invoice for $856.75, then the true price of this invoice is . The supplier is willing to extend credit that exhibits a nominal annual cost of . Suppose Tasty Tuna doesn’t take the discount and instead chooses to pay its supplier five days' late—so that on average, Tasty Tuna will pay its supplier on the 50th day after the date of sale. As a result, Tasty Tuna can decrease its actual nominal cost of trade credit by by paying late.
