Required: 1. Give the entry to record the receipt of the down payment, and the succeeding payment on Dec. 31, 2019. 2. 3. How much revenue is recognized at December 31, 2019 Give the entry to record the delivery of the unit.
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- . West Star Realty Corp. sells a commercial lot in the month of November 2021 underfollowing terms (including VAT):Total contract price P1,120,000Down payment. 11-01-2021 112,000First installment 12-01-2021 112,000The output VAT for the 4th quarter should be:a. P12,000 c. P30,000b. P24,000 d. P120,000#17 On January 15, 2021, Bella Vista Company enters into a contract to build custom equipment for ABC Carpet Company. The contract specified a delivery date of March 1. The equipment was not delivered until March 31. The contract required full payment of $75,000 30 days after delivery. The revenue for this contract should be Question 17 options: a recorded on April 30, 2021. b recorded on January 15, 2021. c recorded on March 31, 2021. d recorded on March 1, 2021.62 In August 2021, Commonlo Corp. commits to selling 100 of its merchandise to M&H Co. for P30,000 (P300 per product). The merchandise is to be delivered to M&H over the next 6 months. After 60 merchandises were delivered, the contract is modified and Commonlo promises to deliver 80 more products for an additional P21,600 (P270 per station). At year-end, Commonlo delivered an additional 90 products. All sales are cash on delivery. How much revenue will be recognized on the contract for the year 2021?
- Problem 10-27 (AICPA Adapted)On December 31, 2020, Ames Company leased equipment for 10 years. Theentity contracted to pay P 400, 000 annual rent on December 31, 2020 andon December 31 of each of the next time years.The lease liability was recorded at P 2, 700, 000 on December 31, 2020before the first payment.The equipment’s useful life is 12 years and the interest rate implicit in thelease is 10%.The entity used the straight line method to depreciate all equipment.1. In recording the December 31, 2021 payment by what amount shouldthe lease liability be reduced?a. 270, 000b. 230, 000c. 225, 000d. 170, 0002. What is the interest expense for 2021?a. 270, 000b. 230, 000c. 200, 000d. 03. What is the lease liability on December 31, 2021?a. 2, 700, 000b. 2, 300, 000c. 2, 130, 00056 In August 2021, Commonlo Corp. commits to selling 100 of its merchandise to M&H Co. for P30,000 (P300 per product). The merchandise is to be delivered to M&H over the next 6 months. After 60 merchandises were delivered, the contract is modified and Commonlo promises to deliver 80 more products for an additional P21,600 (P270 per station). At year-end, Commonlo delivered an additional 90 products. All sales are cash on delivery. Assume that the additional term is a prospective modification to the original contract. How much revenue will be recognized on the contract for the year 2021?Problem 1On December 31, 2021, RAP, Inc. authorized JIN to operate as a franchiseefor an initial franchise fee of P150,000. Of this amount, P60,000 wasreceived upon signing the agreement, and the balance, represented by anote, is due in three annual payments of P30,000 each, beginning December31, 2022. The present value on December 31, 2021 of the three annualpayments appropriately discounted is P72,000. According to theagreement, the nonrefundable down payment represents a fair measure ofthe services already performed by RAP, however, substantial future servicesare required of RAP. Collectability of the note is reasonably certain.On December 31, 2021, RAP should record unearned franchise fees in respectof the JIN franchise ofA. 150,000 C. 72,000B. 90,000 D. -0-
- Problem 21-02 b-f On January 1, 2020, Bridgeport Company contracts to lease equipment for 5 years, agreeing to make a payment of $145,088 at the beginning of each year, starting January 1, 2020. The leased equipment is to be capitalized at $605,000. The asset is to be amortized on a double-declining-balance basis, and the obligation is to be reduced on an effective-interest basis. Bridgeport’s incremental borrowing rate is 6%, and the implicit rate in the lease is 10%, which is known by Bridgeport. Title to the equipment transfers to Bridgeport at the end of the lease. The asset has an estimated useful life of 5 years and no residual value. Prepare the journal entries that Bridgeport should record on January 1, 2020 Date Account Titles and Explanation Debit Credit January 1, 2020 enter an account title To record the lease enter a debit amount enter a credit amount enter an account title To record the lease…Problem 21-02 b-f On January 1, 2020, Bridgeport Company contracts to lease equipment for 5 years, agreeing to make a payment of $145,088 at the beginning of each year, starting January 1, 2020. The leased equipment is to be capitalized at $605,000. The asset is to be amortized on a double-declining-balance basis, and the obligation is to be reduced on an effective-interest basis. Bridgeport’s incremental borrowing rate is 6%, and the implicit rate in the lease is 10%, which is known by Bridgeport. Title to the equipment transfers to Bridgeport at the end of the lease. The asset has an estimated useful life of 5 years and no residual value. What amounts will appear on the lessee’s December 31, 2020, balance sheet relative to the lease contract? BRIDGEPORT COMPANYBalance Sheet (Partial) December 31, 2020 Assets select an opening section name Current Assets Current Liabilities Intangible Assets Long-term Investments Noncurrent Liabilities Property, Plant and Equipment…7...new.e1..... Sage Industries and Pronghorn Inc. enter into an agreement that requires Pronghorn Inc. to build three diesel-electric engines to Sage’s specifications. Upon completion of the engines, Sage has agreed to lease them for a period of 10 years and to assume all costs and risks of ownership. The lease is non-cancelable, becomes effective on January 1, 2020, and requires annual rental payments of $405,443 each January 1, starting January 1, 2020.Sage’s incremental borrowing rate is 8%. The implicit interest rate used by Pronghorn and known to Sage is 7%. The total cost of building the three engines is $2,685,000. The economic life of the engines is estimated to be 10 years, with residual value set at zero. Sage depreciates similar equipment on a straight-line basis. At the end of the lease, Sage assumes title to the engines. Collectibility of the lease payments is probable. (e1) Prepare a lease amortization schedule for 2 years. (Round answers to 0 decimal…
- Problem 10-8 Dexter Company has maintained a policy of acquiring equipment by leasing. On January 1, 2020, Dexter Company entered into a lease agreement for an equipment. The lease stipulates an annual rental payment of P600,000 to be paid every December 31 starting Decemeber 31, 2020. The lease contains neither a transfer of tittle to the lessee nor a purchase option. The equipment has a residual value of P300,000 at the end of the 5 year lease period but us unguaranteed by the lessee. Th economic life of the equipment is 8 years. The implicit interest rate is 12% after considerimg the unguaranteed residual value. The present value of an ordinary annuity of 1 at 12% for 5 period is 3.60. Required: Prepare journal entries on the books of Dexter Company for 2020. Prepare journal entry on December 31,2024 to record the return of the equipment to the lessor as required by the contract. The fair value of the equipment is P200,000.Hw.149. MidMan, Inc. is a distributor that enters into a contract in January 2020 with the manufacturer of Product B. Under the contract, MidMan receives a performance bonus of $800,000 at the end of 2020 if MidMan achieves a milestone of purchasing $5 million of Product B from the manufacturer by December 31, 2020. Historically, the probability of achieving the milestones required to earn the annual bonus has been 100% and MidMan has achieved milestones and received performance bonuses from the manufacturer with respect to similar contracts performed previously. a. What should MidMan do with the $800,000? b. If MidMan should recognize the $800,000, how and when should it be recognized? c. How much revenue will have been recognized by February 29, 2020?PROBLEM: On August, 2019, HBO consigned to GEO 10 laptops costing $15,000 each, paying freight charge of $15,000. At the end of the month, GEO reported sales of 6 handbags at $30,000 each and incurred expenses of $12,500 and remitted the net proceeds due to HBO after deducting a 20% commission on the sales price. REQUIREMENT: How much net income did HBO realize in August on the consignment? A. 37,500 income. B. 32,500 income C. 33,500 loss D. 32,500 loss What is the total cost of inventory of the unsold handbags A. 60,000 B. 66,000 C. 71,000 D. 75,000 THANK YOU SO MUCH IN ADVANCE FOR THE HELP :)