On March 18, Kudos Corporation sells snack products to a retail warehouse club chain for $40,000 (cost of $24,000). The contract includes an obligation for the warehouse club to run certain advertising campaigns for the snack products in exchange for $3,200 cash from Kudos Corporation on the contract date. The comparable price for this type of advertising campaign to be conducted by a third party is $3,200. Required a. Prepare kudos' journal entry on March 18 for the product sale, the cost of the product sale, and the purchase of advertising services. b. Assume instead that Kudos sold $40,000 of product to a customer (cost of $24,000) and has agreed to pay the customer $800 in slotting fees for preferential product placement in displays. Kudos will pay the $800 fee on April 30. Prepare kudos' journal entry on March 18 for the product sale and the cost of the product sale, and then on April 30 for the payment of the slotting fee. • Note: If a line in a journal entry isn't required for the transaction, select "N/A" as the account name and leave the Dr. and Cr. answers blank (zero). Mar. 18 Account Name > > > Dr. Cr. 0 0 0 0 0 0 To record the sale of product Mar. 18 0 0 0 0 To record the cost of sale of product Mar. 18 ос 0 0 b. Mar. 18 Mar. 18 Apr. 30 To record the payment for advertising Account Name To record the sale of product > > > > > > > To record the cost of sale of product To record the payment for advertising Dr. Cr. 0 0 0 OOO 0 0 0 0 0 0 0 0
On March 18, Kudos Corporation sells snack products to a retail warehouse club chain for $40,000 (cost of $24,000). The contract includes an obligation for the warehouse club to run certain advertising campaigns for the snack products in exchange for $3,200 cash from Kudos Corporation on the contract date. The comparable price for this type of advertising campaign to be conducted by a third party is $3,200. Required a. Prepare kudos' journal entry on March 18 for the product sale, the cost of the product sale, and the purchase of advertising services. b. Assume instead that Kudos sold $40,000 of product to a customer (cost of $24,000) and has agreed to pay the customer $800 in slotting fees for preferential product placement in displays. Kudos will pay the $800 fee on April 30. Prepare kudos' journal entry on March 18 for the product sale and the cost of the product sale, and then on April 30 for the payment of the slotting fee. • Note: If a line in a journal entry isn't required for the transaction, select "N/A" as the account name and leave the Dr. and Cr. answers blank (zero). Mar. 18 Account Name > > > Dr. Cr. 0 0 0 0 0 0 To record the sale of product Mar. 18 0 0 0 0 To record the cost of sale of product Mar. 18 ос 0 0 b. Mar. 18 Mar. 18 Apr. 30 To record the payment for advertising Account Name To record the sale of product > > > > > > > To record the cost of sale of product To record the payment for advertising Dr. Cr. 0 0 0 OOO 0 0 0 0 0 0 0 0
Intermediate Accounting: Reporting And Analysis
3rd Edition
ISBN:9781337788281
Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach
Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach
Chapter17: Advanced Issues In Revenue Recognition
Section: Chapter Questions
Problem 3C
Related questions
Question
Transcribed Image Text:On March 18, Kudos Corporation sells snack products to a retail warehouse club chain for $40,000 (cost of $24,000). The contract includes an obligation for the warehouse club to run certain advertising campaigns for the snack products in exchange for $3,200 cash from Kudos Corporation on the contract date. The comparable price for this type of
advertising campaign to be conducted by a third party is $3,200.
Required
a. Prepare kudos' journal entry on March 18 for the product sale, the cost of the product sale, and the purchase of advertising services.
b. Assume instead that Kudos sold $40,000 of product to a customer (cost of $24,000) and has agreed to pay the customer $800 in slotting fees for preferential product placement in displays. Kudos will pay the $800 fee on April 30. Prepare kudos' journal entry on March 18 for the product sale and the cost of the product sale, and then on April 30 for the
payment of the slotting fee.
• Note: If a line in a journal entry isn't required for the transaction, select "N/A" as the account name and leave the Dr. and Cr. answers blank (zero).
Mar. 18
Account Name
> > >
Dr.
Cr.
0
0
0
0
0
0
To record the sale of product
Mar. 18
0
0
0
0
To record the cost of sale of product
Mar. 18
ос
0
0
b.
Mar. 18
Mar. 18
Apr. 30
To record the payment for advertising
Account Name
To record the sale of product
> > >
> > > >
To record the cost of sale of product
To record the payment for advertising
Dr.
Cr.
0
0
0
OOO
0
0
0
0
0
0
0
0
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