Question

In: Accounting

Blossom Company sells goods that cost $325,000 to Pina Colada Company for $415,000 on January 2,...

Blossom Company sells goods that cost $325,000 to Pina Colada Company for $415,000 on January 2, 2020. The sales price includes an installation fee, which is valued at $44,200. The fair value of the goods is $380,800. 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, Pina Colada Company pays Blossom $275,000 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.

Prepare the journal entries for Blossom on January 2, March 1, and June 18, 2020.

Solutions

Expert Solution

two approaches have been followed while answering for determination of the transaction prices.

ekkarill92 answered 2 years ago
Next > < Previous

Related Solutions

Blossom Company sells goods that cost $250,000 to Ayayai Company for $400,000 on January 2, 2020....
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...
Pina Colada Company is a leading manufacturer of sunglasses. One of Pina Colada’s products protects the...
Pina Colada Company is a leading manufacturer of sunglasses. One of Pina Colada’s products protects the eyes from ultraviolet rays. An upscale sporting goods store has contacted Pina Colada about purchasing 16,300 pairs of these sunglasses. Pina Colada’s unit manufacturing cost, based on a full capacity of 112,000 units, is as follows: Direct materials $7 Direct labor 4 Manufacturing overhead (60% fixed) 20 Total manufacturing costs $31 Pina Colada also incurs selling and administrative expenses of $75,620 plus $3 per...
Pina Colada sells a snowboard, EZslide, that is popular with snowboard enthusiasts. The following is information...
Pina Colada sells a snowboard, EZslide, that is popular with snowboard enthusiasts. The following is information relating to Pina Colada’s purchases of EZslide snowboards during September. During the same month, 99 EZslide snowboards were sold. Pina Colada uses a periodic inventory system. Date Explanation Units Unit Cost Total Cost Sept. 1 Inventory 11 $84 $ 924 Sept. 12 Purchases 46 87 4,002 Sept. 19 Purchases 50 88 4,400 Sept. 26 Purchases 18 89 1,602    Totals 125 $10,928 Compute the ending...
Pina Colada Corp. purchased equipment on January 1, 2021 for $148,500. It is estimated that the...
Pina Colada Corp. purchased equipment on January 1, 2021 for $148,500. It is estimated that the equipment will have a $8,250 salvage value at the end of its 5-year useful life. It is also estimated that the equipment will produce 165,000 units over its 5-year life. Answer the following independent questions. Compute the amount of depreciation expense for the year ended December 31, 2021 using the straight-line method of depreciation. Straight-line method $enter the depreciation expense under the straight-line method...
Blossom Incorporated leases a piece of machinery to Pina Company on January 1, 2020, under the...
Blossom Incorporated leases a piece of machinery to Pina Company on January 1, 2020, under the following terms. 1. The lease is to be for 4 years with rental payments of $15,557 to be made at the beginning of each year. 2. The machinery’ has a fair value of $81,480, a book value of $60,800, and an economic life of 10 years. 3. At the end of the lease term, both parties expect the machinery to have a residual value...
The stockholders’ equity accounts of Pina Colada Corp. on January 1, 2017, were as follows. Preferred...
The stockholders’ equity accounts of Pina Colada Corp. on January 1, 2017, were as follows. Preferred Stock ( 7%, $ 100 par noncumulative,  4,150 shares authorized) $ 249,000 Common Stock ($ 5 stated value,  345,000 shares authorized) 1,437,499 Paid-in Capital in Excess of Par Value—Preferred Stock 12,450 Paid-in Capital in Excess of Stated Value—Common Stock 552,000 Retained Earnings 694,000 Treasury Stock ( 4,150 common shares) 33,200 During 2017, the corporation had the following transactions and events pertaining to its stockholders’ equity. Feb....
The stockholders’ equity accounts of Pina Colada Corp. on January 1, 2017, were as follows. Preferred...
The stockholders’ equity accounts of Pina Colada Corp. on January 1, 2017, were as follows. Preferred Stock (7%, $100 par noncumulative, 4,150 shares authorized) $249,000 Common Stock ($5 stated value, 345,000 shares authorized) 1,437,499 Paid-in Capital in Excess of Par Value—Preferred Stock 12,450 Paid-in Capital in Excess of Stated Value—Common Stock 552,000 Retained Earnings 694,000 Treasury Stock (4,150 common shares) 33,200 During 2017, the corporation had the following transactions and events pertaining to its stockholders’ equity. Feb. 1 Issued 4,540...
Blossom Company sells one product. Presented below is information for January for Blossom Company. Jan. 1...
Blossom Company sells one product. Presented below is information for January for Blossom Company. Jan. 1 Inventory 123 units at $5 each 4 Sale 98 units at $8 each 11 Purchase 136 units at $6 each 13 Sale 103 units at $9 each 20 Purchase 169 units at $7 each 27 Sale 108 units at $11 each Blossom uses the FIFO cost flow assumption. All purchases and sales are on account. (a) Assume Blossom uses a periodic system. Prepare all...
Blossom Company sells one product. Presented below is information for January for Blossom Company. Jan. 1...
Blossom Company sells one product. Presented below is information for January for Blossom Company. Jan. 1 Inventory 123 units at $5 each 4 Sale 98 units at $8 each 11 Purchase 136 units at $6 each 13 Sale 103 units at $9 each 20 Purchase 169 units at $7 each 27 Sale 108 units at $11 each Blossom uses the FIFO cost flow assumption. All purchases and sales are on account. Assume Blossom uses a periodic system. Prepare all necessary...
Nash Company sells on credits goods that cost $310,000 to Ricard Company for $409,500 on January...
Nash Company sells on credits goods that cost $310,000 to Ricard Company for $409,500 on January 2, 2020. The sales price includes an installation fee, which has a standalone selling price of $42,500. The standalone selling price of the goods is $367,000. The installation is considered a separate performance obligation and is expected to take 6 months to complete. (a) Prepare the journal entries (if any) to record the sale on January 2, 2020. (Credit account titles are automatically indented...
ADVERTISEMENT
Subjects
ADVERTISEMENT
Latest Questions
ADVERTISEMENT