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Intermediate Accounting: Reporting...

3rd Edition
James M. Wahlen + 2 others
ISBN: 9781337788281

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BuyFindarrow_forward

Intermediate Accounting: Reporting...

3rd Edition
James M. Wahlen + 2 others
ISBN: 9781337788281
Textbook Problem
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On December 1, 2019, AwakcAllNight Inc. sells 5,000 super caffeinated candy bars to Campus Grocers. The candy bars sell for $3 per bar. In addition, AwakcAllNight pays Campus Grocers a $900“placement fee” to ensure that its candy bars are always stocked prominently by the cash register. The $900 is paid at the end of each month based on the results of random inspections of Campus Grocers by AwakcAllNight to ensure that the terms of the contract are being followed.

Required:

  1. 1. Determine the transaction price for Awake AllNight’s revenue contract.
  2. 2. Prepare AwakeAllNight’s journal entries to recognize sales revenue and pay Campus Grocers the placement fee.

1.

To determine

Ascertain the transaction price for Incorporation A’s revenue contract.

Explanation

The transaction price of Incorporation A’s revenue contract is $14,100. Here, $15,000 must be subtracted by...

2.

To determine

Journalize entries to recognize sales revenue and payment of placement fee to Company C.

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