dont give answer in image format Required information[The following information applies to the questions displayed below.]Hospital Equipment Company (HEC) acquired several fMRI machines for its inventory at a cost of $3,800 per machine.HEC usually sells these machines to hospitals at a price of $7,120. HEC also separately sells 12 months of training andrepair services for fMRI machines for $1,780. HEC is paid $7,120 cash on November 30 for the sale of an fMRI machinedelivered on December 1. HEC sold the machine at its regular price, but included one year of free training and repairservice.2. Prepare journal entries would HEC record on November 30 and December 1? (Assume HEC uses a perpetual inventory system forrecording the cost of goods sold.) (If no entry is required for a transaction/event, select "No Journal Entry Required" in the firstaccount field.)View transaction list1 Record the receipt of cash.2 Record the sales revenue for the equipment (MRImachine).3 Record the cost of goods sold.Note :journal entry has been enteredRecord entryClear entryIXItCreditView general journal> Required information[The following information applies to the questions displayed below.]Hospital Equipment Company (HEC) acquired several fMRI machines for its inventory at a cost of $3,800 per machine.HEC usually sells these machines to hospitals at a price of $7,120. HEC also separately sells 12 months of training andrepair services for fMRI machines for $1,780. HEC is paid $7,120 cash on November 30 for the sale of an fMRI machinedelivered on December 1. HEC sold the machine at its regular price, but included one year of free training and repairservice.Required:1. For the machine sold at its regular price, but with one year of "free" training and repair service, determine the dollar amount ofrevenue earned from the equipment sale versus the revenue earned from the training and repair services.EquipmentServiceAllocatedTransactionPrice

A journal entry is a financial accounting record that captures and documents a single transaction or…

Hospital Equipment Company (HEC) acquired several fMRI machines HEC usually sells these machines to hospitals at a price of $7,120. HE repair services for fMRI machines for $1,780. HEC is paid $7,120 cash

Hospital Equipment Company (HEC) acquired several fMRI machines HEC usually sells these machines to hospitals at a price of $7,120. HE repair services for fMRI machines for $1,780. HEC is paid $7,120 cash

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 5P

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St. Johns Medical Center (SJMC) has five medical technicians who are responsible for conducting cardiac catheterization testing in SJMCs Cath Lab. Each technician is paid a salary of 36,000 and is capable of conducting 1,000 procedures per year. The cardiac catheterization equipment is one year old and was purchased for 250,000. It is expected to last five years. The equipments capacity is 25,000 procedures over its life. Depreciation is computed on a straight-line basis, with no salvage value expected. The reading of the catheterization results is conducted by an outside physician whose fee is 120 per test. The technicians report with the outside physicians note of results is sent to the referring physician. In addition to the salaries and equipment, SJMC spends 50,000 for supplies and other costs needed to operate the equipment (assuming 5,000 procedures are conducted). When SJMC purchased the equipment, it fully expected to perform 5,000 procedures per year. In fact, during its first year of operation, 5,000 procedures were run. However, a larger hospital has established a clinic in the city and will siphon off some of SJMCs business. During the coming years, SJMC expects to run only 4,200 cath procedures yearly. SJMC has been charging 850 for the procedureenough to cover the direct costs of the procedure plus an assignment of general overhead (e.g., depreciation on the hospital building, lighting and heating, and janitorial services). At the beginning of the second year, an HMO from a neighboring community approached SJMC and offered to send its clients to SJMC for cardiac catheterization provided that the charge per procedure would be 550. The HMO estimates that it can provide about 500 patients per year. The HMO has indicated that the arrangement is temporaryfor one year only. The HMO expects to have its own testing capabilities within one year. Required: 1. Classify the resources associated with the cardiac catheterization activity into one of the following: (1) committed resources, or (2) flexible resources. 2. Calculate the activity rate for the cardiac catheterization activity. Break the activity rate into fixed and variable components. Now, classify each activity resource as relevant or irrelevant with respect to the following alternatives: (1) accept the HMO offer, or (2) reject the HMO offer. Explain your reasoning. 3. Assume that SJMC will accept the HMO offer if it reduces the hospitals operating costs. Should the HMO offer be accepted? 4. Jerold Bosserman, SJMCs hospital controller, argued against accepting the HMOs offer. Instead, he argued that the hospital should be increasing the charge per procedure rather than accepting business that doesnt even cover full costs. He also was concerned about local physician reaction if word got out that the HMO was receiving procedures for 550. Discuss the merits of Jerolds position. Include in your discussion an assessment of the price increase that would be needed if the objective is to maintain total revenues from cardiac catheterizations experienced in the first year of operation. 5. Chandra Denton, SJMCs administrator, has been informed that one of the Cath Lab technicians is leaving for an opportunity at a larger hospital. She met with the other technicians, and they agreed to increase their hours to pick up the slack so that SJMC wont need to hire another technician. By working a couple hours extra every week, each remaining technician can perform 1,050 procedures per year. They agreed to do this for an increase in salary of 2,000 per year. How does this outcome affect the analysis of the HMO offer? 6. Assuming that SJMC wants to bring in the same revenues earned in the cardiac catheterization activitys first year less the reduction in resource spending attributable to using only four technicians, how much must SJMC charge for a procedure?
On March 17, Advanced Technologies purchased a patent related to laser surgery techniques. The purchase price of the patent is $1,220,000. The patent is expected to benefit the company for the next five years. The company had the following additional costs: $22,000 in legal fees associated with the purchase and filing of the patent, $37,000 to advertise its new laser surgery techniques, and $47,000 to train employees. None of these additional costs were included in the purchase price or paid to the seller. Now assume that instead of purchasing the patent, Advanced Technologies spent $1,220,000 to develop the patent internally, consisting of personnel ($810,000), equipment ($306,000), and materials ($104,000). All additional costs were incurred for the same amount. What is the recorded cost of the patent? total capitalized cost=
Anemic Inc. manufactures and sells specialized equipment normally at P1,000,000 for the medical industry. Anemic also provides installation and maintenance service with the purchased equipment. The entity also offers this service at P300,000 separately to other clients for two years. Anemic enters into a contract on June 1, 2021, with HealthyLiving, a relatively new local hospital. The hospital purchases the specialized equipment with installation and maintenance services for P1,200,000. The terms of payment are: a 20% downpayment and the remaining is payable with a non-interest bearing note for 5 equal annual installments. Also included in the terms of the contract is training services for six months as the hospital needs technical knowledge for the relatively new equipment. The hospital estimated that the training will cost them P160,000. Anemic delivered the equipment on June 30, 2021, while the services offered commenced on the same date. The entity’s borrowing cost is…
Kaiser Exporters buys used medical equipment and sells it to variousforeign health care institutions. On June 15, the company committed to sell medical equipmentto a foreign hospital for 800,000 FC. The equipment, with a cost of $325,000, was shipped tothe customer on August 15 with terms FOB shipping point and payment due on October 15.At the time of the commitment, Kaiser acquired a forward contract to sell 800,000 FC in 120days. Selected spot and forward rates are as follows:June 15 /June 30/ August 15/ September 30Spot rate . . . . . . . . . . . . . . . . . . . . . . . . . . . $0.500/ $0.485/ $0.480/ $0.470Forward rate . . . . . . . . . . . . . . . . . . . . . . . . 0.510 /0.490/ 0.475/ 0.468The relevant discount rate is 6% and changes in the value of the firm commitment are measured as changes in the forward rate over time. Assume that the hedge is accounted for as a fairvalue hedge and that the time value of the hedge is included in the assessment of effectiveness.Assuming that…
A distributor of artistic iron-based fixtures acquires a piece for $1,000, terms FOB shipping point. Additional costs in obtaining it and offering it for sale include $150 for transportation-in, $300 for import duties, $100 for insurance during shipment, $200 for advertising, a $50 voluntary gratuity to the delivery person, $75 for enhanced store lighting, and $250 for sales staff salaries. For computing inventory, what cost is assigned to this artistic piece?
ABC Co., consigned 5 dozen of stainless chairs to DEF Co. on April 1, 2021. Each chair cost P120 and the consignor paid P600 for the shipment to the consignee. On August 15, 2021, 36 chairs were already sold and the consignee rendered an account sale, and remitted the balance due the consignor in the amount of P5,580 after deducting the following: Commission at 15% of the selling price Selling expenses P360Delivery and installation 180Compute for the cost of inventory on consignment in the hand of DEF Co.
On January 1, 2030, KKK consigned 300 units of gaming keyboards to SSS Each keyboard costs P400 and is sold at 50% above cost. After selling 200 keyboards, the remaining 200 units were repaired for some defects for P4,000. Because of this, SSS increased the selling price by P60. At the end of the month, SSS remitted P129,960 after deducting 15% commission, and reimbursable expenses of P1700 delivery expense and the P4,000 repair of the 100 units. How many consigned units were sold?
Roeher Company sold $9,000 of its specialty shelving to Elkins Office Supply Co. on account. Prepare the entries when (a) Roeher makes the sale, (b) Roeher grants an allowance of $700 when some of the shelving does not meet exact specifications but still could be sold by Elkins, and (c) at year-end; Roeher estimates that an additional $200 in allowances will be granted to Elkins.
Sheridan Company incurs the following costs in purchasing equipment: invoice price, $40,500; shipping, $1,025; installation and testing, $1,600; one-year insurance policy, $2,750.What is the cost of the equipment?
Mary Corporation has a branch in Caloocan. During 2021, the home office shipped to the branch supplies costing P156,000 at a billed price of 30% above cost. The inventories of supplies at the branch were as follows: January 1, 2021 P110,000; December 31, 2021 128,000. On December 31, 2021, the home office holds inventories of P112,800 which includes P11,500 held on consignment and which excludes P5,000 inventories out on consignment. How much is the inventories in a combined balanced sheet as of December 31, 2021? Present solution in good accounting form.
ASAP!! Raza Hospital purchased X-ray machine on 4 Jan, 2015 at a list price of Rs.850,000 with a trade discount of 20% the payment was made within the discount time as per term, that was 2/10, n/30. Sale Tax of 16% was also paid on the net cash price the hospital also incurred the following expenses Transportation Charges 1,200 Installation and Testing cost 1,828 Packaging Charges 1,000 License fees for the current year 1,200 3 Years life insurance 3,600 Insurance in transit 1,170 During installation work of the machine, an adjacent machine was damaged and the repair cost paid Rs. 650. After four months of successful use, the machine was cleaned, Imbricated, and overhauled at a cost of Rs.1,200 it was estimated that the x-ray machine has scrap value of Rs.8,000 at the end of its estimated life of 8 years. The manufacture has also estimated that it will run 14,900 working hours…
In accordance with IFRS 15,assuming all information are the same, except that at the end of the year 15,000 units of correction tapes are estimated to be distributed instead of 20% of the ballpens will not be redeemed by customers and an additional P 25 must be collected aside from 10 used ballpens only, how much is the total revenue for the year? In accordance with IFRS 15,assuming all information are the same, except that at the end of the year 15,000 units of correction tapes are estimated to be distributed instead of 20% of the ballpens will not be redeemed by customers , how much is the unearned revenue from premium claims at the end of the year?