6.2 Economy Appliance Co. manufactures low-price, no-frills appliances that are in great demand for rental units. Pricing and cost nformation on Economy's main products are as follows. Item Refrigerator Range Stackable washer/dryer unit Stand-Alone Selling Price (Cost) $500 ($260) $560 ($275) $700 ($400) Customers can contract a purchase either individually at the stated prices or for a three-item bundle with a price of $1,800. The bun rice includes delivery and installation. Economy provides delivery and installation as a stand-alone service for any of its products fo 100. The company follows IFRS. nstructions Respond to the requirements related to the following independent revenue arrangements for Economy. a. On June 1, 2023, Economy sold 100 washer/dryer units without installation to Laplante Rentals for $70,000 (on credit). Laplan newer customer and is unsure of how this product will work in its older rental units. Economy offers a 60-day return privilege a estimates, based on prior experience with sales of this product, that 4% of the units will be returned. Prepare the journal entries the sale and related cost of goods sold on June 1, 2023. b. Yellow Card Property Managers operates upscale student apartment buildings. On May 1, 2023, Economy signs a contract with YellowCard for 300 appliance bundles to be delivered and installed in one of its new buildings. YellowCard pays 20% cash at con signing and will pay the balance on delivery and installation, no later than August 1, 2023. Prepare journal entries for Economy May 1, 2023, and (2) August 1, 2023, when all appliances are delivered and installed. c. Digging Deeper Refer to the arrangement in part (b). It would help YellowCard secure lease agreements with students if the delivery and installation of the appliance bundles can be completed by July 1, 2023. YellowCard offers a 10% bonus payment if Economy can complete delivery and installation by July 1, 2023. Economy estimates its chances of meeting the bonus deadline t 60%, based on a number of prior contracts of similar scale. Repeat the requirement for part (b), given this bonus provision. Assu installation is completed by July 1, 2023. d. Epic Rentals would like to take advantage of the bundle price for its 400-unit project. On February 1, 2023, Economy signs a con with Epic for delivery and installation of 400 bundles. Under the agreement, Economy will hold the appliance bundles in its warehouses until the new rental units are ready for installation. Epic pays 10% cash at contract signing. On April 1, 2023, Econo completes manufacture of the appliances in the Epic bundle order and places them in the warehouse. Economy and Epic have documented the warehouse arrangement and identified the units designated for Epic. The units are ready to ship, and Economy Lon (1) Febru not call those units to other customers Pronoro journal entries for For 000 and (2) April 1, 2000

6.2 Economy Appliance Co. manufactures low-price, no-frills appliances that are in great demand for rental units. Pricing and cost nformation on Economy's main products are as follows. Item Refrigerator Range Stackable washer/dryer unit Stand-Alone Selling Price (Cost) $500 ($260) $560 ($275) $700 ($400) Customers can contract a purchase either individually at the stated prices or for a three-item bundle with a price of $1,800. The bun rice includes delivery and installation. Economy provides delivery and installation as a stand-alone service for any of its products fo 100. The company follows IFRS. nstructions Respond to the requirements related to the following independent revenue arrangements for Economy. a. On June 1, 2023, Economy sold 100 washer/dryer units without installation to Laplante Rentals for $70,000 (on credit). Laplan newer customer and is unsure of how this product will work in its older rental units. Economy offers a 60-day return privilege a estimates, based on prior experience with sales of this product, that 4% of the units will be returned. Prepare the journal entries the sale and related cost of goods sold on June 1, 2023. b. Yellow Card Property Managers operates upscale student apartment buildings. On May 1, 2023, Economy signs a contract with YellowCard for 300 appliance bundles to be delivered and installed in one of its new buildings. YellowCard pays 20% cash at con signing and will pay the balance on delivery and installation, no later than August 1, 2023. Prepare journal entries for Economy May 1, 2023, and (2) August 1, 2023, when all appliances are delivered and installed. c. Digging Deeper Refer to the arrangement in part (b). It would help YellowCard secure lease agreements with students if the delivery and installation of the appliance bundles can be completed by July 1, 2023. YellowCard offers a 10% bonus payment if Economy can complete delivery and installation by July 1, 2023. Economy estimates its chances of meeting the bonus deadline t 60%, based on a number of prior contracts of similar scale. Repeat the requirement for part (b), given this bonus provision. Assu installation is completed by July 1, 2023. d. Epic Rentals would like to take advantage of the bundle price for its 400-unit project. On February 1, 2023, Economy signs a con with Epic for delivery and installation of 400 bundles. Under the agreement, Economy will hold the appliance bundles in its warehouses until the new rental units are ready for installation. Epic pays 10% cash at contract signing. On April 1, 2023, Econo completes manufacture of the appliances in the Epic bundle order and places them in the warehouse. Economy and Epic have documented the warehouse arrangement and identified the units designated for Epic. The units are ready to ship, and Economy Lon (1) Febru not call those units to other customers Pronoro journal entries for For 000 and (2) April 1, 2000

Principles of Accounting Volume 2

19th Edition

ISBN:9781947172609

Author:OpenStax

Publisher:OpenStax

Chapter10: Short-term Decision Making

Section: Chapter Questions

Problem 4EA: Zena Technology sells arc computer printers for $55 per unit. Unit product costs are: A special...

See similar textbooks