Fact Pattern: On November 1, Year 1, Iba Co. entered into a contract with a customer to sell 150 machines for $75 each. The customer obtains control of the machines at contract inception. Iba's cost of each machine is $45. Iiba allows the customer to return any unused machine within 1 year from the sale date and receive a full refund. Iba uses the expected value method to estimate the variable consideration. Based on Iba's experience and other relevant factors, it reasonably estimates that a total of 20 machines (12 machines in Year 1 and 8 machines in Year 2) will be returned, Iba estimates that (1) the machines are expected to be returned in salable condition and (2) the costs of recovering the machines will be immaterial. During Year 1, 10 machines were returned. At the end of Year 1, Iba continues to estimate that a total of 20 machines will be returned within 1 year from the sale date. What amount of revenue from this contract will be recognized by Iba in Year 17 $3,900 $9,750 $11,250 O $10,500

Eureka Co. started work on a P10M fixed price construction contract in 20x1. The performance obligation in the contract is satisfied overtime. Eureka Co. measures its progress based on professional survey of performance completed to date (i.e., an output method). The estimated total contract costs are P6M. Information on the contract is as follows:                                                          20x1            20x2 Costs incurred per year               2,700,000     1,980,000 Progress on the contract                 42%              80% The customer accepted all billings but defaulted in its payment in 20x2. Eureka Co. assessed, on December 31,20x2, that it cannot collect 4% of the total contract price.    Requirement: Compute for the revenues, costs of construction and profits recognized in 20x1 and 20x2, repectively.

Southwest Milling Company purchased a front-end loader to move stacks of lumber. The loader had a list price of $118,380. The seller agreed to allow a 5.50 percent discount because Southwest Milling paid cash. Delivery terms were FOB shipping point. Transportation cost amounted to $2,900. Southwest Milling had to hire a specialist to calibrate the loader. The specialist's fee was $850. The loader operator is paid an annual salary of $13,170. The cost of the company's theft insurance policy increased by $1,980 per year as a result of acquiring the loader. The loader had a four-year useful life and an expected salvage value of $5,600. Required: Determine the amount to be capitalized in an asset account for the purchase of the front-end loader. Note: Round your answers to the nearest whole dollar. Amounts to be deducted should be indicated with minus sign. Costs that are to be capitalized: List price Total costs $ 0

On March 10, 20X1, Indigo Company sold to Barr Hardware 230 tool sets at a price of $54 each (cost $28 per set) with terms of n/60, f.o.b. shipping point. Indigo allows Barr to return any unused tool sets within 60 days of purchase. Indigo estimates that (1) 10 sets will be returned, (2) the cost of recovering the products will be immaterial, and (3) the returned tools sets can be resold at a profit. On March 25, 20X1, Barr returned 6 tool sets and received a credit to its account. Prepare journal entries for Indigo to record (1) the sale on March 10, 20X1, (2) the return on March 25, 20X1, and (3) any adjusting entries required on March 31, 20X1 (when Indigo prepares financial statements). Indigo believes the original estimate of returns is correct. Two journal entries are needed for each part, thus six total journal entries.

Southwest Milling Company purchased a front-end loader to move stacks of lumber. The loader had a list price of $118,640. The seller agreed to allow a 5.00 percent discount because Southwest Milling paid cash. Delivery terms were FOB shipping point. Transportation cost amounted to $2,230. Southwest Milling had to hire a specialist to calibrate the loader. The specialist's fee was $970. The loader operator is paid an annual salary of $44,100. The cost of the company's theft insurance policy increased by $1,800 per year as a result of acquiring the loader. The loader had a four-year useful life and an expected salvage value of $14,200 Required: Determine the amount to be capitalized in an asset account for the purchase of the front-end loader Note: Round your answers to the nearest whole dollar. Amounts to be deducted should be indicated with minus sign.

ABC Co. delivered 150 portable gas stoves to DEF Co. on consignment. These stoves cost P2,700 each and could be sold for P4,500. The consignee is to be allowed a commission of 15% of the selling price. The agreement for the consignment contract stated that ABC Co. would draw a sight draft on the consignee for 60% of the cost of the stoves and the advance shall be recovered periodically by monthly deductions (in proportion to units sold) from the remittances which accompany the account sales. All expenses of the consignee are to be deducted monthly as incurred. The consignee rendered an Account Sales at the end of the first month showing among others, the following information: Advertising P6,750; Delivery Expense P3,375 and Commission P10,125. How much is the amount remitted by DEF to ABC for the first month?

On January 1, 20x7, CVM Co began constructing a P2,100,000 contract. The entity uses the percentage of completion method. For the year ended December 31, 20x7, the Company billed its client an additional 55% of the contract price. Data relating to the construction follows: 20x7 Construction in progress Estimated cost to complete Cost incurred Excess of construction in progress over billings How much is the estimated remaining cost in 20x7? 441,000 ? 425,250 (84,000) 20x8 ? ? 969,000 (330,750) 20x9 ? 675,750

Kingbird Company manufactures a check-in kiosk with an estimated economic life of 12 years and leases it to National Airlines for a period of 10 years. The normal selling price of the equipment is $304,659, and its unguaranteed residual value at the end of the lease term is estimated to be $19.400. National will pay annual payments of $40,800 at the beginning of each year. Kingbird incurred costs of $164,100 in manufacturing the equipment and $3,900 in sales commissions in closing the lease. Kingbird has determined that the collectibility of the lease payments is probable and that the implicit interest rate is 8%. Click here to view factor tables. (a) Discuss the nature of this lease in relation to the lessor. This is a sales-type lease Compute the amount of each of the following items. (Round present value factor calculations to 5 decimal places, eg. 1.25124 and the final answers to O decimal places, eg. 5.275) (1) Lease receivable S (2) Sales price S (3) Cost of sales $

Fajardo Company sells appliance service contracts agreeing to repair appliance for 2-year period. Fajardo Company’s past experience  is that, of the total amount for repairs on service contracts, 40% is incurred evenly during the 1st contract year and 60% evenly during the second contract year. Receipts from service contracts for the 2 years ended December 31, 2021,  are as follows: 2020, P500,000; 2021, P600,000. Receipts from contracts are credited to unearned service contract revenue.   Assume that all contract sales are made evenly during the year. Group of answer choices 630,000 480,000 360,000 470,000

Since 1970, Super Rise, Inc., has provided maintenance services for elevators. On January 1, 2018, Super Riseobtains a contract to maintain an elevator in a 90-story building in New York City for 10 months and receives afixed payment of $80,000. The contract specifies that Super Rise will receive an additional $40,000 at the end ofthe 10 months if there is no unexpected delay, stoppage, or accident during the year. Super Rise estimates variable consideration to be the most likely amount it will receive.Required:1. Assume that, because the building sees a constant flux of people throughout the day, Super Rise is allowed toaccess the elevators and related mechanical equipment only between 3am and 5am on any given day, which is insufficient to perform some of the more time-consuming repair work. As a result, Super Rise believes thatunexpected delays are likely and that it will not earn the bonus. Prepare the journal entry Super Rise wouldrecord on January 1