Question

Blossom Company sells goods that cost $250,000 to Ayayai Company for $400,000 on January 2, 2020. The sales price includes an installation fee, which is valued at $41,000. The fair value of the goods is $369,000. The goods were delivered on March 1, 2020. Installation is considered a separate performance obligation and was completed on June 18, 2020. Under the terms of the contract, Ayayai Company pays Blossom $250,000 upon delivery of the goods and the balance at the completion of the installation.

Using the five-step process for revenue recognition, determine when and how much revenue would be recognized by Blossom. Assume IFRS is followed. (Round percentage allocations to 2 decimal places, 15.25 and final answers to 0 decimal places, e.g. 5,275.)

Performance Obligation		When?		How much?
Deliver goods		choose a transaction date                                                                      January 2, 2020March 1, 2020June 18, 2020		$enter a dollar amount rounded to 0 decimal places
Installation		choose a transaction date                                                                      January 2, 2020March 1, 2020June 18, 2020		enter a dollar amount rounded to 0 decimal places
Total				$enter a total amount rounded to 0 decimal places

eTextbook and Media

List of Accounts

  

  

Prepare the journal entries for Blossom on January 2, March 1, and June 18, 2020. (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 0 for the amounts. Record journal entries in the order presented in the problem.)

	Account Titles and Explanation	Debit	Credit
choose a transaction date                                                                      January 2, 2020June 18, 2020March 1, 2020	enter an account title	enter a debit amount	enter a credit amount
	enter an account title	enter a debit amount	enter a credit amount
choose a transaction date                                                                      January 2, 2020March 1, 2020June 18, 2020	enter an account title to record sales	enter a debit amount	enter a credit amount
	enter an account title to record sales	enter a debit amount	enter a credit amount
	enter an account title to record sales	enter a debit amount	enter a credit amount
	(To record sales)
choose a transaction date                                                                      January 2, 2020June 18, 2020March 1, 2020	enter an account title to record cost of goods sold	enter a debit amount	enter a credit amount
	enter an account title to record cost of goods sold	enter a debit amount	enter a credit amount
	(To record cost of goods sold)
choose a transaction date                                                                      June 18, 2020January 2, 2020March 1, 2020	enter an account title	enter a debit amount	enter a credit amount
	enter an account title	enter a debit amount	enter a credit amount
	enter an account title	enter a debit amount	enter a credit amount

Answer 1