Carryon Company sells a product and a 12-month service package for that for a combined price of $810. Separately, the product and the service sell for $300 and $600, respectively. At the time of purchase, how much of the combined sales price should be credited to deferred revenue?
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- Rix Company sells home appliances and provides installation and service for its customers. On April 1, 2019, a customer purchased a dishwasher that Rix normally sells for 1,000. In addition, the customer purchased the installation service and a 3-year service contract, with stand-alone selling prices of 200 and 400, respectively. Because the customer purchased all three items as a bundle, Rix charged the customer 1,400. Required: 1. How should the transaction price be allocated among the products? 2. Prepare the journal entries to recognize revenue related to each product in 2019.Steele Corp. purchases equipment for $30,000. Regarding the purchase, Steele paid shipping of $1,200, paid installation fees of $2,750, pays annual maintenance cost of $250, and received a 10% discount on sales price. Determine the acquisition cost of the equipment.Steele Corp. purchases equipment for $25,000. Regarding the purchase, Steele recorded the following transactions: Paid shipping of $1,000 Paid installation fees of $2,000 Pays annual maintenance cost of $200 Received a 5% discount on $25,000 sales price Determine the acquisition cost of the equipment.
- Kikiam Company sells equipment service contracts that cover a two-year period. The sales price of each contract is P4,000. Kikiam Company’s past experience shows that of the total pesos spent for repairs in service contracts, 40% in incurred evenly during the first contract year and 60% evenly during the second contract year. Kikiam Company sold 1,500 contracts evenly throughout 2020 and 900 contracts evenly throughout 2021. How much should Kikiam Company report as contract service revenue for the year ended December 31, 2021?MAYUMI Co. sold 50,000 units at P 225 per unit during May of this year. The cost per unit is P150. The entity granted the customers right to return within 90 days if not satisfied and will receive either a full refund if cash was already paid or a full credit for the amount owed to the entity. It is estimated that 7% of the units sold will be returned within the 90-day period. The entity used the perpetual method. What amount of sales revenue should be reported for the month of May?Regal Appliances consigned 60 television sets to Gal Company on January 1, 2020 for sale at P10,800 each and paid P10,000 transportation costs. At the end of the month, Gal reported sale of 25 television sets and remitted P243,000 which is net of ten percent commission. What amount of consignment sales revenue should be reported by Regal?
- Cobra Company sells appliance service contracts agreeing to repair appliances for a three-year period. The past experience is that the total amount spent for repairs on service contracts, 40% is incurred evenly during the first contract year, 25% is incurred evenly during the second contract year and 35% is incurred evenly during the 3rd contract year. Receipts from service contract sales are P500,000 for 2020 and P600,000 for 2021. How much is the balance of unearned revenue pertaining to 2020 sales as of December 2021?ABC Co. sells Product X, Product Y, and Product Z to a customer for a lump sum price of P90,000. The products will be delivered at a different point in time. ABC Co. regularly sells products X, Y and Z separately at P20,000, P40,000 and P60,000, respectively. How much is the allocated transaction price of Product Z?Lewis Co. sold merchandise to AdCo for $60,000 and received $60,000 for that sale one month later. One weekprior to receiving payment from AdCo, Lewis made a $10,000 payment to AdCo for advertising services thathave a fair value of $7,500. After accounting for any necessary adjustments, how much revenue should LewisCo. record for the merchandise sold to AdCo?
- An entity was offering premium as a sales promotion scheme and that during the year it purchased 10,000 premiums for P20 each. Customers need to remit 10 boxes and P5 to redeem one premium. Assume there were no redemptions during the first year of the promotion, which of the following statements would be correct if it uses the revenue approach? a. The entity will report an inventory of premiums at the net cost of P15. Tb. he entity will report an estimated liability equal to the premium expense. c. None of the other choices are correct. Td. he entity will not report any expense since there were no redemption. e. No accounting liability shall be recognized since there were no redemptions.NAPAPALUNOK AKO AS OF THE MOMENT INC. sells 3-year service contracts for air conditioning units for P1,500 each. Sales of service contracts are made evenly throughout each year. The company estimates that 15% of repairs are done in the first year from the date of sale, 35% in the second year, and 50% in the third year. Service contracts sold are as follows. How much is the unearned revenue from service contracts as of December 31, 2019? a. P 1,417,500 b. P 2,525,250 c. P 3,370,500 d. P 3,942,750ABC Company sells equipment service contracts that cover 2-year period. The sales price of each contract is P 5,000. ABC past experience shows that of the total pesos spent for repairs in service contracts, 40% is incurred evenly during the first contract year and 60% evenly during the second contract year. ABC sold 1,000 contracts evenly throughout 2018 and 800 evenly throughout 2019. In its December 31,2018 statement of financial position, what amount should ABC report as unearned revenue?