Identifying Customer Control and Recording Advance Payment Allstar Inc. sells uniforms and spirit clothing to local school teams. Allen High School placed an order for 80 items for a total selling price of $3,520 on September 14, 2020. The cost of the merchandise to Allstar Inc. is $1,784. To place the order, Allstar Inc. required an $800 down payment on September 14, 2020. Delivery of the order to Allen is completed on October 7, 2020, at which time the remaining balance was collected from Allen. a. Demonstrate the five steps of the revenue recognition process for this scenario. Description of revenue recognition step Application of the revenue recognition step Step 1 Answer Answer Step 2 Answer Answer Step 3 Answer Calculation of transaction price: Answer Step 4 Answer Answer Step 5 Answer Answer b. Record Allstar’s entry on September 14, 2020. Account Name Dr. Cr. Answer Answer Answer Answer Answer Answer c. Record Allstar’s entries on October 7, 2020. Account Name Dr. Cr. Cash Answer Answer Answer Answer Answer Sales Revenue Answer Answer To record the sale of product. Answer Answer Answer Answer Answer Answer To record the cost of sale of product. Please answer all parts of the question.
Identifying Customer Control and Recording Advance Payment Allstar Inc. sells uniforms and spirit clothing to local school teams. Allen High School placed an order for 80 items for a total selling price of $3,520 on September 14, 2020. The cost of the merchandise to Allstar Inc. is $1,784. To place the order, Allstar Inc. required an $800 down payment on September 14, 2020. Delivery of the order to Allen is completed on October 7, 2020, at which time the remaining balance was collected from Allen. a. Demonstrate the five steps of the revenue recognition process for this scenario. Description of revenue recognition step Application of the revenue recognition step Step 1 Answer Answer Step 2 Answer Answer Step 3 Answer Calculation of transaction price: Answer Step 4 Answer Answer Step 5 Answer Answer b. Record Allstar’s entry on September 14, 2020. Account Name Dr. Cr. Answer Answer Answer Answer Answer Answer c. Record Allstar’s entries on October 7, 2020. Account Name Dr. Cr. Cash Answer Answer Answer Answer Answer Sales Revenue Answer Answer To record the sale of product. Answer Answer Answer Answer Answer Answer To record the cost of sale of product. Please answer all parts of the question.
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
Chapter9: Current Liabilities And Contingent Obligations
Section: Chapter Questions
Problem 21E: Cash Rebates On January 1, 2020, Fro-Yo Inc. began offering customers a cash rebate of 5.00 if the...
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Identifying Customer Control and Recording Advance Payment
Allstar Inc. sells uniforms and spirit clothing to local school teams. Allen High School placed an order for 80 items for a total selling price of $3,520 on September 14, 2020. The cost of the merchandise to Allstar Inc. is $1,784. To place the order, Allstar Inc. required an $800 down payment on September 14, 2020. Delivery of the order to Allen is completed on October 7, 2020, at which time the remaining balance was collected from Allen.
a. Demonstrate the five steps of the revenue recognition process for this scenario.
Description of revenue recognition step | Application of the revenue recognition step | ||
---|---|---|---|
Step 1 | Answer |
Answer
Step 2 | Answer |
Answer
Step 3 | Answer |
Calculation of transaction price: | Answer |
Step 4 | Answer |
Answer
Step 5 | Answer |
Answer
b. Record Allstar’s entry on September 14, 2020.
Account Name | Dr. | Cr. |
---|---|---|
Answer |
Answer | Answer |
Answer |
Answer | Answer |
c. Record Allstar’s entries on October 7, 2020.
Account Name | Dr. | Cr. |
---|---|---|
Cash | Answer | Answer |
Answer |
Answer | Answer | |
Sales Revenue | Answer | Answer |
To record the sale of product. | ||
Answer |
Answer | Answer |
Answer |
Answer | Answer |
To record the cost of sale of product. |
Please answer all parts of the question.
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