Splish Windows manufactures and sells custom storm windows for enclosed porches. Splish also provides installation service for the windows. The installation process does not involve changes in the windows, so this service can be provided by other vendors. Splish enters into the following contract on June 1, 2021, with a local homeowner. The customer purchases windows for a price of $4,600 and chooses Splish to do the installation. Splish charges the same price for the windows irrespective of whether it does the installation or not. The price of the installation service is estimated to have a fair value of $1,800. The customer pays Splish $4,200 (which equals the fair value of the windows, which have a cost of $2,400) upon delivery and the remaining balance upon installation of the windows. The windows are delivered on August 1, 2021, Splish completes installation on September 15, 2021, and the customer pays the balance due. (Round amounts to nearest dollar.) Prepare the journal entries for Splish in 2021. (Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts. Record journal entries in the order presented in the problem.)

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
icon
Related questions
Question
Splish Windows manufactures and sells custom storm windows for enclosed porches. Splish also provides installation service for the windows. The installation process does not involve changes in the
windows, so this service can be provided by other vendors. Splish enters into the following contract on June 1, 2021, with a local homeowner. The customer purchases windows for a price of $4,600
and chooses Splish to do the installation. Splish charges the same price for the windows irrespective of whether it does the installation or not. The price of the installation service is estimated to have
a fair value of $1,800. The customer pays Splish $4,200 (which equals the fair value of the windows, which have a cost of $2,400) upon delivery and the remaining balance upon installation of the
windows. The windows are delivered on August 1, 2021, Splish completes installation on September 15, 2021, and the customer pays the balance due. (Round amounts to nearest dollar.)
Prepare the journal entries for Splish in 2021. (Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No
Entry" for the account titles and enter 0 for the amounts. Record journal entries in the order presented in the problem.)
Account Titles and Explanation
Date
V
V
(To record windows delivered)
(To record cost of goods sold)
Debit
Credit
Transcribed Image Text:Splish Windows manufactures and sells custom storm windows for enclosed porches. Splish also provides installation service for the windows. The installation process does not involve changes in the windows, so this service can be provided by other vendors. Splish enters into the following contract on June 1, 2021, with a local homeowner. The customer purchases windows for a price of $4,600 and chooses Splish to do the installation. Splish charges the same price for the windows irrespective of whether it does the installation or not. The price of the installation service is estimated to have a fair value of $1,800. The customer pays Splish $4,200 (which equals the fair value of the windows, which have a cost of $2,400) upon delivery and the remaining balance upon installation of the windows. The windows are delivered on August 1, 2021, Splish completes installation on September 15, 2021, and the customer pays the balance due. (Round amounts to nearest dollar.) Prepare the journal entries for Splish in 2021. (Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts. Record journal entries in the order presented in the problem.) Account Titles and Explanation Date V V (To record windows delivered) (To record cost of goods sold) Debit Credit
Expert Solution
steps

Step by step

Solved in 2 steps

Blurred answer
Knowledge Booster
Revenue Recognition
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.
Similar questions
  • SEE MORE QUESTIONS
Recommended textbooks for you
FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
Accounting
ISBN:
9781259964947
Author:
Libby
Publisher:
MCG
Accounting
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Horngren's Cost Accounting: A Managerial Emphasis…
Horngren's Cost Accounting: A Managerial Emphasis…
Accounting
ISBN:
9780134475585
Author:
Srikant M. Datar, Madhav V. Rajan
Publisher:
PEARSON
Intermediate Accounting
Intermediate Accounting
Accounting
ISBN:
9781259722660
Author:
J. David Spiceland, Mark W. Nelson, Wayne M Thomas
Publisher:
McGraw-Hill Education
Financial and Managerial Accounting
Financial and Managerial Accounting
Accounting
ISBN:
9781259726705
Author:
John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting Principles
Publisher:
McGraw-Hill Education