E18-9 (Allocate Transaction Price) Sanchez Co. enters into a contract to sell Product A and Product B on January 2, 2015, for an upfront cash payment of R$150,000. Product A will be delivered in 2 years (January 2, 2017) and Product B will be delivered in 5 years (January 2, 2020). Sanchez Co. allocates the R$150,000 to Products A and B on a relative standalone selling price basis as follows. Product A Product B Standalone Selling Prices R$ 40,000 120,000 R$160,000 Percent Allocated 25% 75% Allocated Amounts R$ 37,500 112,500 R$150,000 Sanchez Co. uses an interest rate of 6%, which is its incremental borrowing rate. Instructions (a) Prepare the journal entries necessary on January 2, 2015, and December 31, 2015. (b) Prepare the journal entries necessary on December 31, 2016. (c) Prepare the journal entries necessary on January 2, 2017.
E18-9 (Allocate Transaction Price) Sanchez Co. enters into a contract to sell Product A and Product B on January 2, 2015, for an upfront cash payment of R$150,000. Product A will be delivered in 2 years (January 2, 2017) and Product B will be delivered in 5 years (January 2, 2020). Sanchez Co. allocates the R$150,000 to Products A and B on a relative standalone selling price basis as follows. Product A Product B Standalone Selling Prices R$ 40,000 120,000 R$160,000 Percent Allocated 25% 75% Allocated Amounts R$ 37,500 112,500 R$150,000 Sanchez Co. uses an interest rate of 6%, which is its incremental borrowing rate. Instructions (a) Prepare the journal entries necessary on January 2, 2015, and December 31, 2015. (b) Prepare the journal entries necessary on December 31, 2016. (c) Prepare the journal entries necessary on January 2, 2017.
Intermediate Accounting: Reporting And Analysis
3rd Edition
ISBN:9781337788281
Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach
Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach
Chapter17: Advanced Issues In Revenue Recognition
Section: Chapter Questions
Problem 6P
Related questions
Question
Expert Solution
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
Step by step
Solved in 2 steps
Knowledge Booster
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.Recommended textbooks for you
Intermediate Accounting: Reporting And Analysis
Accounting
ISBN:
9781337788281
Author:
James M. Wahlen, Jefferson P. Jones, Donald Pagach
Publisher:
Cengage Learning
Cornerstones of Financial Accounting
Accounting
ISBN:
9781337690881
Author:
Jay Rich, Jeff Jones
Publisher:
Cengage Learning
Intermediate Accounting: Reporting And Analysis
Accounting
ISBN:
9781337788281
Author:
James M. Wahlen, Jefferson P. Jones, Donald Pagach
Publisher:
Cengage Learning
Cornerstones of Financial Accounting
Accounting
ISBN:
9781337690881
Author:
Jay Rich, Jeff Jones
Publisher:
Cengage Learning