According to the revenue recognition principle, revenues should be recognized when or as the company performs acts promised to the customer. For many businesses, this condition is met at the point of delivery of goods or services. The following transactions occurred in September: Required: For each of the transactions, if revenue is to be recognized in September, indicate the amount. (Enter your answers in dollars but not in millions.) Activity Amount a. Guppie Enterprises Inc. issued $12 million in new common stock. b. Chrome University received $36,270,000 cash for 93,000 five-game-season football tickets. None of the games have been played. c. Chrome played the first football game referred to in (b). d. Mell Construction Company signed a contract with a customer for the construction of a new $660,000 warehouse. At the signing, Mell received a check for $66,000 as a deposit to be applied against amounts earned during the first phase of construction. Answer from Mell's standpoint. e. A popular snowboarding magazine company received a total of $2,200 today from subscribers. The subscriptions begin in the next fiscal year. Answer from the magazine company's standpoint. f. TrusTee Communications sold a $330 cell phone plan for service in September to a customer who charged the sale on his credit card. Answer from the standpoint of TrusTee Communications.
According to the revenue recognition principle, revenues should be recognized when or as the company performs acts promised to the customer. For many businesses, this condition is met at the point of delivery of goods or services. The following transactions occurred in September: Required: For each of the transactions, if revenue is to be recognized in September, indicate the amount. (Enter your answers in dollars but not in millions.) Activity Amount a. Guppie Enterprises Inc. issued $12 million in new common stock. b. Chrome University received $36,270,000 cash for 93,000 five-game-season football tickets. None of the games have been played. c. Chrome played the first football game referred to in (b). d. Mell Construction Company signed a contract with a customer for the construction of a new $660,000 warehouse. At the signing, Mell received a check for $66,000 as a deposit to be applied against amounts earned during the first phase of construction. Answer from Mell's standpoint. e. A popular snowboarding magazine company received a total of $2,200 today from subscribers. The subscriptions begin in the next fiscal year. Answer from the magazine company's standpoint. f. TrusTee Communications sold a $330 cell phone plan for service in September to a customer who charged the sale on his credit card. Answer from the standpoint of TrusTee Communications.
College Accounting (Book Only): A Career Approach
12th Edition
ISBN:9781305084087
Author:Cathy J. Scott
Publisher:Cathy J. Scott
Chapter5: Closing Entries And The Post-closing Trial Balance
Section: Chapter Questions
Problem 8E
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Question
Transcribed Image Text:According to the revenue recognition principle, revenues should be recognized when or as the company performs acts promised to
the customer. For many businesses, this condition is met at the point of delivery of goods or services. The following transactions
occurred in September:
Required:
For each of the transactions, if revenue is to be recognized in September, indicate the amount. (Enter your answers in dollars but not
in millions.)
Activity
Amount
a. Guppie Enterprises Inc. issued $12 million in new common stock.
b. Chrome University received $36,270,000 cash for 93,000 five-game-season
football tickets. None of the games have been played.
c. Chrome played the first football game referred to in (b).
d. Mell Construction Company signed a contract with a customer for the
construction of a new $660,000 warehouse. At the signing, Mell received a check
for $66,000 as a deposit to be applied against amounts earned during the first
phase of construction. Answer from Mell's standpoint.
e. A popular snowboarding magazine company received a total of $2,200 today
from subscribers. The subscriptions begin in the next fiscal year. Answer from
the magazine company's standpoint.
f. TrusTee Communications sold a $330 cell phone plan for service in September
to a customer who charged the sale on his credit card. Answer from the
standpoint of TrusTee Communications.
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