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1. Theo corporation entered into a contract with Maddon Company to sell Maddon goods for $200,000....

1. Theo corporation entered into a contract with Maddon Company to sell Maddon goods for $200,000. About a week later, Maddon ordered additional goods and the two companies agreed to a $50,000 price. Then the two companies agreed, for simplicity, to add the additional goods to the original order, which had not yet been shipped.

How should Theo account for the contract modification?

2. Theo corporation entered into a contract with Maddon Company to sell Maddon goods for $200,000. About a week later, Maddon ordered additional goods and the two companies agreed to a $50,000 price. The stand-alone price for the additional goods is typically $40,000. The two companies agreed to modify the original contract to include the additional goods at a total price of $250,000.

How should Theo account for the contract modification?

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Expert Solution

ekkarill92 answered 2 years ago
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