Question
In: Accounting
Determine the Transaction Price On January 1, 2017, Loud Company enters into a 2-year contract with...
Determine the Transaction Price On January 1, 2017, Loud Company enters into a 2-year contract with a cus- tomer for an unlimited talk and 5 GB data wireless plan for $65 per month. The contract includes a smartphone for which the customer pays $299. Loud also sells the smartphone and monthly service plan separately, charging $649 for the smartphone and $65 for the monthly service for the unlimited talk and 5 GB data wireless plan.
Required: 1. Calculate the transaction price for the smartphone and unlimited talk and 5 GB data wireless plan assuming that Loud allocates consideration based on stand-alone prices. 2. Record the initial journal entry for Loud Company’s sale of a 2-year contract on January 1, 2017, and the monthly journal entry.
Solutions
ekkarill92 answered 1 year agoRelated Solutions
On January 1, 2017, Loud Company enters into a 2-year contract with a customer for an...
On January 1, 2017, Loud Company enters into a 2-year contract
with a customer for an unlimited talk and 5 GB data wireless plan
for $65 per month. The contract includes a smartphone for which the
customer pays $299. Loud also sells the smartphone and monthly
service plan separately, charging $649 for the smartphone and $65
for the monthly service for the unlimited talk and 5 GB data
wireless plan. On July 1, 2017, the customer realizes that she
needs...
On January 1, 2017, Loud Company enters into a 2-year contract with a customer for an...
On January 1, 2017, Loud Company enters into a 2-year contract
with a customer for an unlimited talk and 5 GB data wireless plan
for $65 per month. The contract includes a smartphone for which the
customer pays $299. Loud also sells the smartphone and monthly
service plan separately, charging $649 for the smartphone and $65
for the monthly service for the unlimited talk and 5 GB data
wireless plan.
Required:
1.
Calculate the transaction price for the smartphone and...
On January 1, 2017, Loud Company enters into a 2-year contract with a customer for an...
On January 1, 2017, Loud Company enters into a 2-year contract
with a customer for an unlimited talk and 5 GB data wireless plan
for $65 per month. The contract includes a smartphone for which the
customer pays $299. Loud also sells the smartphone and monthly
service plan separately, charging $649 for the smartphone and $65
for the monthly service for the unlimited talk and 5 GB data
wireless plan.
Required:
1.
Calculate the transaction price
for the smartphone and...
On January 1, 2017, Fulton Inc. enters into a contract with Gibson to deliver goods. Gibson...
On January 1, 2017, Fulton Inc. enters into a contract with
Gibson to deliver goods. Gibson pays $100,000 at the time the
contract is signed, at which time the goods are transferred and
Fulton’s performance obligation is complete. In addition, Gibson
agrees to pay Fulton $100,000 on December 31, 2017, and December
31, 2018. If Fulton entered into a financing arrangement with
Gibson it would charge an interest rate of 9%.
Required:
1. Determine the transaction price for the contract...
On January 2, 2019, TI enters into a contract with Drewry Corp. to build a new...
On January 2, 2019, TI enters into a contract with Drewry Corp.
to build a new piece of equipment. The contract price is
$3,200,000, and construction is expected to take 18 months. Drewry
is billed and pays $1,600,000 of the contract price on January 2,
2019, and will pay the balance at completion.
TI estimates that the cost of construction will be
$2,300,000.
Drewry includes two performance bonuses in the contact:
•
U.S. Bonus: If the equipment design receives a...
On August 1, 2017, Aiken Corporation enters into a contract with Benton Corp. to sell it...
On August 1, 2017, Aiken Corporation enters into a contract with
Benton Corp. to sell it $25,000 of goods. Aiken will deliver the
goods on August 30, 2017, and Benton will pay the full amount upon
acceptance. The goods were manufactured by Aiken at a cost of
$18,000. Both Aiken and Benton consider the acceptance of the goods
on August 30 a formality given that Benton has purchased the same
goods from Aiken numerous times without incident. On August 30,...
Transaction Analysis and Financial Statements Blue Jay Delivery Service is incorporated on January 2 and enters...
Transaction Analysis and Financial Statements
Blue Jay Delivery Service is incorporated on January 2 and
enters into the following transactions during its first month of
operations:
January 2:
Filed articles of incorporation with the state and issued
100,000 shares of capital stock. Cash of $100,000 is received from
the new owners for the shares.
January 3:
Purchased a warehouse and land for $80,000 in cash. An
appraiser values the land at $20,000 and the warehouse at
$60,000.
January 4:
Signed...
a) A telecommunications company enters into a contract with a customer. Under the contract, the company...
a) A telecommunications company enters into a contract with a
customer. Under the contract, the company promises to provide to
the customer 4 GB data, 300 minutes of talk time, and 500 texts for
$36.
Required:
Briefly explain how the telecommunications company should
account for the contract under NZ IFRS 15. You need to refer to the
relevant requirements but not to any specific paragraph of NZ IFRS
15.
a) A telecommunications company enters into a contract with a customer. Under the contract, the company...
a) A telecommunications company enters into a contract with a
customer. Under the contract, the company promises to provide to
the customer 4 GB data, 300 minutes of talk time, and 500 texts for
$36.
Required:
Briefly explain how the telecommunications company should
account for the contract under NZ IFRS 15. You need to refer to the
relevant requirements but not to any specific paragraph of NZ IFRS
15.
b) A company sells mobile phone sets for $99 each. The...
Pina Corporation enters into a 6-year lease of equipment on January 1, 2017, which requires 6...
Pina Corporation enters into a 6-year lease of equipment on
January 1, 2017, which requires 6 annual payments of $38,200 each,
beginning January 1, 2017. In addition, Pina guarantees the lessor
a residual value of $18,500 at lease-end. The equipment has a
useful life of 7 years. Assume that for Lost Ark Company, the
lessor, collectibility is reasonably predictable, there are no
important uncertainties concerning costs, and the carrying amount
of the equipment is $208,718.
Prepare Lost Ark’s January 1,...
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