Financial & Managerial Accounting
13th Edition
ISBN: 9781285866307
Author: Carl Warren, James M. Reeve, Jonathan Duchac
Publisher: Cengage Learning
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Chapter 5, Problem 5.4CP
1)
To determine
The income statement: This is a financial statement that shows the net income earned or net loss suffered by a company through reporting all the revenues earned and expenses incurred by the company over a specific period of time. An income statement is also known as an operations statement, an earnings statement, a revenue statement, or a
To Prepare: A projected single-step income statement of Company W for the year ending October 31, 2017.
2) a)
To determine
To Recommend: The implication of the proposed changes.
b)
To determine
To Describe: Any possible concerns that have related to the proposed changes.
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Allocating Transaction Price to Performance Obligations and Recording Sales
Maximum Inc. (retailer) has a loyalty program that rewards its customers one point per $1 spent. Points are redeemable for $0.20 off future purchases. A
customer purchases products (cost of $196) for cash at the usual selling price of $280 and earns 280 points redeemable for $56 off future purchases of goods or
services. The retailer expects redemption of 252 points or 90% of points earned.
Required
a. How should the transaction price be allocated among the performance obligation(s)?
*Note: Carry all decimals in calculations; round the final answer to the nearest dollar.
Performance
Obligations
Product purchase s
Loyalty rewards
Total
Transaction
Price
as stated
Account Name
To record sale of product.
280 ✔ S
To record cost of sale of product.
280 S
b. Prepare Maximum's journal entry to record the $280 sale to the customer and the cost of that sale where the customer earned 280 loyalty points.
*Note: If a…
Allocating Transaction Price to Performance Obligations and Recording Sales
Maximum Inc. (retailer) has a loyalty program that rewards its customers one point per $1 spent. Points are redeemable for $0.20 off future purchases. A customer purchases products (cost of $280) for cash at the usual selling price of $400 and earns 400 points redeemable for $80 off future purchases of goods or services. The retailer expects redemption of 360 points or 90% of points earned.
a. How should the transaction price be allocated among the performance obligation(s)?Note: Round each allocated transaction price in the table below to the nearest dollar.
Performance Obligations
TransactionPriceas Stated
StandaloneSellingPrice
AllocatedTransaction Price(rounded)
Product purchase
Answer
Answer
Answer
Loyalty rewards
Answer
Answer
Answer
Answer
Answer
Answer
b. Prepare Maximum’s journal entry to record the $400 sale to the customer where the customer earned 400…
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Question Content Area
Accounts receivable turnover and days’ sales in receivables
For two recent years, Robinhood Company reported the following:
Line Item Description
20Y9
20Y8
Sales
$7,906,000
$6,726,000
Accounts receivable:
Beginning of year
600,000
540,000
End of year
580,000
600,000
a. Determine the accounts receivable turnover for 20Y9 and 20Y8. Round your answers to one decimal place.
b. Determine the days’ sales in receivables for 20Y9 and 20Y8. Assume 365 days in a year. Round intermediate calculations and final answers to one decimal place.
Chapter 5 Solutions
Financial & Managerial Accounting
Ch. 5 - Prob. 1DQCh. 5 - Prob. 2DQCh. 5 - The credit period during which the buyer of...Ch. 5 - What is the meaning of (A) 1/15, n/60; (B) n/30;...Ch. 5 - How are sales to customers using .MasterCard and...Ch. 5 - Prob. 6DQCh. 5 - Prob. 7DQCh. 5 - Name three accounts that would normally appear in...Ch. 5 - Audio Outfitter Inc., which uses a perpetual...Ch. 5 - Prob. 10DQ
Ch. 5 - Prob. 5.1APECh. 5 - Gross profit During the current year, merchandise...Ch. 5 - Prob. 5.2APECh. 5 - Purchases transactions Hoffman Company purchased...Ch. 5 - Prob. 5.3APECh. 5 - Prob. 5.3BPECh. 5 - Freight terms Determine the amount to be paid in...Ch. 5 - Freight terms Determine the amount to be paid in...Ch. 5 - Prob. 5.5APECh. 5 - Transactions for buyer and seller Shore Co. sold...Ch. 5 - Prob. 5.6APECh. 5 - Inventory shrinkage Hahn Flooring Company's...Ch. 5 - Ratio of safes to assets Financial statement data...Ch. 5 - Prob. 5.7BPECh. 5 - Determining gross profit During the current year,...Ch. 5 - Determining cost of merchandise sold For a recent...Ch. 5 - Purchase-related transactions The Stationery...Ch. 5 - Purchase-related transactions A retailer is...Ch. 5 - Prob. 5.5EXCh. 5 - Prob. 5.6EXCh. 5 - Prob. 5.7EXCh. 5 - Prob. 5.8EXCh. 5 - Prob. 5.9EXCh. 5 - Prob. 5.10EXCh. 5 - Sales-related transactions The debits and credits...Ch. 5 - Prob. 5.12EXCh. 5 - Determining amounts to be paid on invoices...Ch. 5 - Sales-related transactions Showcase Co., a...Ch. 5 - Purchase-related transactions Based on the data...Ch. 5 - Prob. 5.16EXCh. 5 - Prob. 5.17EXCh. 5 - Prob. 5.18EXCh. 5 - Normal balances of merchandise accounts What is...Ch. 5 - Prob. 5.20EXCh. 5 - Income statement for merchandiser The following...Ch. 5 - Determining amounts for items omitted from income...Ch. 5 - Multiple-step income statement On October 31,...Ch. 5 - Prob. 5.24EXCh. 5 - Prob. 5.25EXCh. 5 - Adjusting entry for merchandise inventory...Ch. 5 - Prob. 5.27EXCh. 5 - Prob. 5.28EXCh. 5 - Prob. 5.29EXCh. 5 - Prob. 5.30EXCh. 5 - Prob. 5.31EXCh. 5 - Prob. 5.32EXCh. 5 - Prob. 5.33EXCh. 5 - Prob. 5.34EXCh. 5 - Cost of merchandise sold and related items The...Ch. 5 - Cost of merchandise sold Based on the following...Ch. 5 - Prob. 5.37EXCh. 5 - Prob. 5.38EXCh. 5 - Prob. 5.39EXCh. 5 - Purchase-related transactions using perpetual...Ch. 5 - Sales-related transactions using perpetual...Ch. 5 - Sales-related and purchase-related transactions...Ch. 5 - Sales-related and purchase-related transactions...Ch. 5 - Multiple step income statement and report form of...Ch. 5 - Prob. 5.6APRCh. 5 - Appendix Purchase-related transactions using...Ch. 5 - Appendix Sales-related and purchase-related...Ch. 5 - Appendix Sales-related and purchase-related...Ch. 5 - Periodic inventory accounts, multiple-step income...Ch. 5 - Purchase-related transactions using perpetual...Ch. 5 - Sales-related transactions using perpetual...Ch. 5 - Sales-related and purchase-related transactions...Ch. 5 - Sales-related and purchase-related transactions...Ch. 5 - Multiple-step income statement and report form of...Ch. 5 - Prob. 5.6BPRCh. 5 - Appendix Purchase-related transactions using...Ch. 5 - Prob. 5.8BPRCh. 5 - Appendix Sales-related and purchase-related...Ch. 5 - Prob. 5.10BPRCh. 5 - Continuing problem Palisade Creek Co. is a...Ch. 5 - Prob. 5.1CPCh. 5 - Prob. 5.2CPCh. 5 - Prob. 5.3CPCh. 5 - Prob. 5.4CP
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