Since 1970, Super Rise, Inc., has provided maintenance services for elevators. On January 1, 2021, Super Rise obtains a contract to maintain an elevator in a 90-story building in New York City for 10 months and receives a fixed payment of $110,000. The contract specifies that Super Rise will receive an additional $55,000 at the end of the 10 months if there is no unexpected delay, stoppage, c accident during the year. Super Rise estimates variable consideration to be the most likely amount it will receive. Required: 1. Assume that Super Rise anticipates it will earn the performance bonus, but is highly uncertain about its estimate given unfamiliai with the building and uncertainty about its access to the elevators and related equipment. Prepare the journal entry Super Rise wOL record on January 1. 2. Assume the same facts as requirement 1. In addition assume that, on May 31, Super Rise determines that it has sufficient experier with the company to make an accurate estimate of the likelihood that it will earn the performance bonus, and concludes that it is lik to earn the performance bonus. Prepare the journal entry Super Rise would record on May 31 to recognize May revenue and any necessar revision in its estimated bonus receivable
Since 1970, Super Rise, Inc., has provided maintenance services for elevators. On January 1, 2021, Super Rise obtains a contract to maintain an elevator in a 90-story building in New York City for 10 months and receives a fixed payment of $110,000. The contract specifies that Super Rise will receive an additional $55,000 at the end of the 10 months if there is no unexpected delay, stoppage, c accident during the year. Super Rise estimates variable consideration to be the most likely amount it will receive. Required: 1. Assume that Super Rise anticipates it will earn the performance bonus, but is highly uncertain about its estimate given unfamiliai with the building and uncertainty about its access to the elevators and related equipment. Prepare the journal entry Super Rise wOL record on January 1. 2. Assume the same facts as requirement 1. In addition assume that, on May 31, Super Rise determines that it has sufficient experier with the company to make an accurate estimate of the likelihood that it will earn the performance bonus, and concludes that it is lik to earn the performance bonus. Prepare the journal entry Super Rise would record on May 31 to recognize May revenue and any necessar revision in its estimated bonus receivable
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:Since 1970, Super Rise, Inc., has provided maintenance services for elevators. On January 1, 2021, Super Rise obtains a contract to
maintain an elevator in a 90-story building in New York City for 10 months and receives a fixed payment of $110,000. The contract
specifies that Super Rise will receive an additional $55,000 at the end of the 10 months if there is no unexpected delay, stoppage, or
accident during the year. Super Rise estimates variable consideration to be the most likely amount it will receive.
Required:
1. Assume that Super Rise anticipates it will earn the performance bonus, but is highly uncertain about its estimate given unfamiliarity
with the building and uncertainty about its access to the elevators and related equipment. Prepare the journal entry Super Rise would
record on January 1.
2. Assume the same facts as requirement 1. In addition assume that, on May 31, Super Rise determines that it has sufficient experience
with the company to make an accurate estimate of the likelihood that it will earn the performance bonus, and concludes that it is likely
to earn the performance bonus. Prepare the journal entry Super Rise would record on May 31 to recognize May revenue and any
necessary revision in its estimated bonus receivable.
Complete this question by entering your answers in the tabs below.
Required 1
Required 2
Assume that Super Rise anticipates it will earn the performance bonus, but is highly uncertain about its estimate given unfamiliarity with
the building and uncertainty about its access to the elevators and related equipment. Prepare the journal entry Super Rise would record
on January 1. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.)
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