For each of the following separate situations, determine how much revenue is recognized in December (using accrual basis accounting). a. On December 7, Oklahoma City Thunder sold a $130 ticket to a basketball game to be played in March. b. Tesla sold and delivered a $98,000 car on December 25. The customer will not pay until February. c. Deloitte signs a contract on December 1 to provide 40 days of advisory services with receipt of $50,000 due at the end of the contract. On December 31, 75% of the services have been completed. Situations a. Sale of a ticket to a basketball game b. Sale of a car on credit c. Contract to provide advisory services Revenue recognized
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- Hitzu Co. sold a copier (that costs $6,500) for $13,000 cash with a two-year parts warranty to a customer on August 16 of Year 1. Hitzu expects warranty costs to be 5% of dollar sales. It records warranty expense with an adjusting entry on December 31. On January 5 of Year 2, the copier requires on-site repairs that are completed the same day. The repairs cost $140 for materials taken from the repair parts inventory. These are the only repairs required in Year 2 for this copier. 1. How much warranty expense does the company report for this copier in Year 1? Warranty expense 2. How much is the estimated warranty liability for this copier as of December 31 of Year 1? Estimated warranty liability 3. How much is the estimated warranty liability for this copier as of December 31 of Year 2?In December, a company signed a contract with a regular customer to sell products for $100,000. In January, the company received a payment of $100,000 from this customer for products to be delivered in February. Revenue regarding this transaction is recognized: In February, when the products are delivered In January, when payment is received Equally over the 3 months In December, when the contract is signedQuestion involving Revenue Recognition: How much revenue should be recognized by the following Company, in each of the month's of March, April, May, June, July, August, and September? A company pre-sells services to be performed from May through September, inclusive. If payment is made in full by April 1, a 4% discount is allowed. In March, 245 customers took advantage of the discount and purchased the services for $650 each. In June, 220 customers purchased the services for $785, and in July, 95 purchased it for the same price. For the customers who pay after May 1, services start in the month the customer makes the payment. Please explain for each month. Months $ March April May June July August September
- Hitzu Co. sold a copier (that costs $4,800) for $6,000 cash with a two-year parts warranty to a customer on August 16 of Year 1. Hitzu expects warranty costs to be 4% of dollar sales. It records warranty expense with an adjusting entry on December 31. On January 5 of Year 2, the copier requires on-site repairs that are completed the same day. The repairs cost $209 for materials taken from the repair parts inventory. These are the only repairs required in Year 2 for this copier. 1. How much warranty expense does the company report for this copier in Year 1? 2. How much is the estimated warranty liability for this copier as of December 31 of Year 1? 3. How much is the estimated warranty liability for this copier as of December 31 of Year 2? 4. Prepare journal entries to record (a) the copier’s sale; (b) the adjustment to recognize the warranty expense on December 31 of Year 1; and (c) the repairs that occur on January 5 of Year 2.Mr X enrolls in a 12-month customer service assistance program for a computer software from CYBER COMPANY costing P1,200 per month on August 1, 20x8. Given that the computer assistance occurs evenly throughout the year, CYBER COMPANY uses the “proportion of time” as its measure for membership revenue, what is the amount of sales revenue to be recognized on December 31?Hitzu Co. sold a copier (that costs $5,500) for $11,000 cash with a two-year parts warranty to a customer on August 16 of Year 1. Hitzu expects warranty costs to be 3% of dollar sales. It records warranty expense with an adjusting entry on December 31. On January 5 of Year 2, the copier requires on-site repairs that are completed the same day. The repairs cost $123 for materials taken from the repair parts inventory. These are the only repairs required in Year 2 for this copier.
- [The following information applies to the questions displayed below.] Hitzu Company sold a copier (that costs $6,500) for $13,000 cash with a two-year parts warranty to a customer on August 16 of Year 1. Hitzu expects warranty costs to be 4% of dollar sales. It records warranty expense with an adjusting entry on December 31. On January 5 of Year 2, the copier requires on-site repairs that are completed the same day. The repairs cost $138 for materials taken from the parts inventory. These are the only repairs required in Year 2 for this copier. 1. How much warranty expense does the company report for this copier in Year 1? 2. How much is the estimated warranty liability for this copier as of December 31 of Year 1? 3. How much is the estimated warranty liability for this copier as of December 31 of Year 2? 4. Prepare journal entries to record (a) the copier's sale; (b) the adjustment to recognize the warranty expense on December 31 of Year 1; and (c) the repairs that occur on January 5…[The following information applies to the questions displayed below.] Hitzu Company sold a copier (that costs $6,500) for $13,000 cash with a two-year parts warranty to a customer on August 16 of Year 1. Hitzu expects warranty costs to be 4% of dollar sales. It records warranty expense with an adjusting entry on December 31. On January 5 of Year 2, the copier requires on-site repairs that are completed the same day. The repairs cost $138 for materials taken from the parts inventory. These are the only repairs required in Year 2 for this copier. 1. How much warranty expense does the company report for this copier in Year 1? 2. How much is the estimated warranty liability for this copier as of December 31 of Year 1? 3. How much is the estimated warranty liability for this copier as of December 31 of Year 2? 4. Prepare journal entries to record (a) the copier's sale; (b) the adjustment to recognize the warranty expense on December 31 of Year 1; and (c) the repairs that occur on January 5…[The following information applies to the questions displayed below.] Hitzu Company sold a copier (that costs $4,500) for $9,000 cash with a two-year parts warranty to a customer on August 16 of Year 1. Hitzu expects warranty costs to be 3% of dollar sales. It records warranty expense with an adjusting entry on December 31. On January 5 of Year 2, the copier requires on-site repairs that are completed the same day. The repairs cost $135 for materials taken from the parts inventory. These are the only repairs required in Year 2 for this copier. Exercise 9-12 (Algo) Warranty expense and liability computations and entries LO P4 1. How much warranty expense does the company report for this copier in Year 1? 2. How much is the estimated warranty liability for this copier as of December 31 of Year 1? 3. How much is the estimated warranty liability for this copier as of December 31 of Year 2? 4. Prepare journal entries to record (a) the copier's sale; (b) the adjustment to recognize the…
- On July 8, Azure Corporation enters into an agreement with one of its customers, Madsen, Inc. to provide them with 4,500 units at a cost of $500 per unit. Madsen sends a cash deposit of $225,000 on the same day. Azure sends the first 2,700 units on August 31, with an invoice for $675,000 due September 15. The remaining 1,800 units are delivered on October 15, along with an invoice for the remaining amount of the total $2,250,000 purchase price, due October 31. Madsen made all payments on the invoice due dates. Assume that Azure Corporation had no uncertainties about its own ability to meet the terms of the contract or about Madsen, Inc.'s ability and willingness to pay. Prepare the journal entries to record the events (leaving out the accounting for Azure's costs). Date July 8 August 31 September 15 October 15 October 31 Account To record the deposit. To record initial delivery of units. To collect cash on account. To record delivery of remaining units. To collect cash on account. <<…During the month of December, Hexon steels made a 676,000 credit sale. The state sales tax rate is 6% and the local sales tax rate is 1.5%. Prepare the appropriate journal entry. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.)During December, Rainey Equipment made a 676,000 credit sale. The state sales tax rate is 6% and the local sales tax rate is 1.5%. Prepare the appropriate journal entry. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.)