YellowCard Property Managers operates upscale student apartment buildings. On May 1, 2020, Cheyenne signs a contract withYellowCard for 320 appliance bundles to be delivered and installed in one of its new buildings. YellowCard pays 20% cash atcontract signing and will pay the balance upon installation no later than August 1, 2020. Prepare journal entries for Cheyenne on(1) May 1, 2020, and (2) August 1, 2020, when all appliances are installed. (Credit account titles are automatically indented when theamount 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. Date Account Titles and ExplanationDebitCreditMay(1) 1,2020Aug.(2) 1,2020(To record sales)(To record cost of goods sold). Cheyenne Appliance Co. manufactures low-price, no-frills appliances that are in great demand for rental units. Pricing and costinformation on Cheyenne's main products are as follows.StandaloneItemSelling Price (Cost)Refrigerator$510($260 )Range570(280 )Stackable washer/dryer unit710(390 )Customers can contract to purchase either individually at the stated prices or a three-item bundle with a price of $1,830. The bundleprice includes delivery and installation. Cheyenne also provides installation (not a separate performance obligation).Respond to the requirements related to the following independent revenue arrangements for Cheyenne Appliance Co.

Answered: YellowCard Property Managers operates…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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YellowCard Property Managers operates upscale student apartment buildings. On May 1, 2020, Cheyenne signs a contract with
YellowCard for 320 appliance bundles to be delivered and installed in one of its new buildings. YellowCard pays 20% cash at
contract signing and will pay the balance upon installation no later than August 1, 2020. Prepare journal entries for Cheyenne on
(1) May 1, 2020, and (2) August 1, 2020, when all appliances are installed. (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. Date Account Titles and Explanation
Debit
Credit
May
(1) 1,
2020
Aug.
(2) 1,
2020
(To record sales)
(To record cost of goods sold).

Cheyenne Appliance Co. manufactures low-price, no-frills appliances that are in great demand for rental units. Pricing and cost
information on Cheyenne's main products are as follows.
Standalone
Item
Selling Price (Cost)
Refrigerator
$510
($260 )
Range
570
(280 )
Stackable washer/dryer unit
710
(390 )
Customers can contract to purchase either individually at the stated prices or a three-item bundle with a price of $1,830. The bundle
price includes delivery and installation. Cheyenne also provides installation (not a separate performance obligation).
Respond to the requirements related to the following independent revenue arrangements for Cheyenne Appliance Co.

Expert Solution

Step 1

When a contract is signed between two or more parties, it entails that there are some terms and conditions that should be followed. There could be agreements on the combined price of the goods and about the terms of payments. The payments could be made as a down payment initially and the balance amount can be paid in installments.

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