Liabilities Liabilities are an obligation of the business to pay to the creditors in future for the goods and services purchased on account or any for other financial benefit received. It can be current liabilities or a non-current liabilities depending upon the time period in which it is paid. To Record: the advanced collection of $21 million for gift cards of Company A in November.

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Answer 1

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Chapter 8, Problem 8.10E

1

To determine

Liabilities

Liabilities are an obligation of the business to pay to the creditors in future for the goods and services purchased on account or any for other financial benefit received. It can be current liabilities or a non-current liabilities depending upon the time period in which it is paid.

To Record: the advanced collection of $21 million for gift cards of Company A in November.

2

To determine

To Record: the revenue on gift cards of $14,000,000 that would be redeemed in December.

3

To determine

the ending balance in the deferred revenue account of Company A.

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E8.7 (LO 3), AP Da Mug, a coffee-mug producer, generally conducts over half of its business in the last month of the calendar year due to holiday sales. By the end of December, its fiscal year-end, Da Mug had accumulated Cost of Goods Sold in the amount of $245,000. Da Mug’s business model is to maintain minimal WIP Inventory and FG Inventory, so these two accounts had balances of just $10,000 and $15,000, respectively, on December 31. Da Mug does hold a fair amount of RM Inventory, however, so it will be able to quickly fulfill its orders. As a result, its December 31 RM Inventory (all direct materials) is $80,000. Da Mug utilizes a normal costing system, in its effort to have timely applied MOH information for each custom job, and its budgeted MOH rate is $2.25/direct labor hour. Budgeted MOH at the beginning of the year was $150,000; actual MOH costs incurred by the end of the year were $140,000. Actual direct labor hours used were 61,000. Required 1. Was Da Mug’s MOH cost for…

At December 31, 2021, Suo’s Boutique had 2,000 gift certificates outstanding, which had been sold to customers during 2021 for P50 each. Sue’s operates on a gross margin of 60% of its sales. What amount of revenue pertaining to the 2,000 outstanding gift certificates should be deferred at December 31, 2021? a. P0 b. P40,000. c. P60,000. d. P100,000.

Apple Inc. is the number one online music retailer through its iTunes music store. Apple sells iTunes gift cards in $15, $25, and $50 increments. Assume Apple sells $19.2 million in iTunes gift cards in November, and customers redeem $12.2 million of the gift cards in December. 3. What is the ending balance in the Deferred Revenue account? (Enter your answer in dollars, not in millions. (i.e. 5.5 should be entered as 5,500,000).)

Answer 2

Question

Chapter 8, Problem 8.10E

1

To determine

Liabilities

Liabilities are an obligation of the business to pay to the creditors in future for the goods and services purchased on account or any for other financial benefit received. It can be current liabilities or a non-current liabilities depending upon the time period in which it is paid.

To Record: the advanced collection of $21 million for gift cards of Company A in November.

2

To determine

To Record: the revenue on gift cards of $14,000,000 that would be redeemed in December.

3

To determine

the ending balance in the deferred revenue account of Company A.

Expert Solution & Answer

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Answer 3

Question

Chapter 8, Problem 8.10E

1

To determine

Liabilities

Liabilities are an obligation of the business to pay to the creditors in future for the goods and services purchased on account or any for other financial benefit received. It can be current liabilities or a non-current liabilities depending upon the time period in which it is paid.

To Record: the advanced collection of $21 million for gift cards of Company A in November.

2

To determine

To Record: the revenue on gift cards of $14,000,000 that would be redeemed in December.

3

To determine

the ending balance in the deferred revenue account of Company A.

Expert Solution & Answer

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Answer 4

Question

Chapter 8, Problem 8.10E

1

To determine

Liabilities

Liabilities are an obligation of the business to pay to the creditors in future for the goods and services purchased on account or any for other financial benefit received. It can be current liabilities or a non-current liabilities depending upon the time period in which it is paid.

To Record: the advanced collection of $21 million for gift cards of Company A in November.

2

To determine

To Record: the revenue on gift cards of $14,000,000 that would be redeemed in December.

3

To determine

the ending balance in the deferred revenue account of Company A.

Expert Solution & Answer

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Answer 5

Chapter 8, Problem 8.10E

1

To determine

Liabilities

Liabilities are an obligation of the business to pay to the creditors in future for the goods and services purchased on account or any for other financial benefit received. It can be current liabilities or a non-current liabilities depending upon the time period in which it is paid.

To Record: the advanced collection of $21 million for gift cards of Company A in November.

2

To determine

To Record: the revenue on gift cards of $14,000,000 that would be redeemed in December.

3

To determine

the ending balance in the deferred revenue account of Company A.

Answer 6

Chapter 8, Problem 8.10E

1

To determine

Liabilities

Liabilities are an obligation of the business to pay to the creditors in future for the goods and services purchased on account or any for other financial benefit received. It can be current liabilities or a non-current liabilities depending upon the time period in which it is paid.

To Record: the advanced collection of $21 million for gift cards of Company A in November.

Answer 7

Chapter 8, Problem 8.10E

1

To determine

Liabilities

Liabilities are an obligation of the business to pay to the creditors in future for the goods and services purchased on account or any for other financial benefit received. It can be current liabilities or a non-current liabilities depending upon the time period in which it is paid.

To Record: the advanced collection of $21 million for gift cards of Company A in November.

Answer 8

2

To determine

To Record: the revenue on gift cards of $14,000,000 that would be redeemed in December.

Answer 9

2

To determine

To Record: the revenue on gift cards of $14,000,000 that would be redeemed in December.

Answer 10

3

To determine

the ending balance in the deferred revenue account of Company A.

Answer 11

3

To determine

the ending balance in the deferred revenue account of Company A.

Answer 12

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Answer 13

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Answer 14

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Answer 15

Ch. 8 - Prob. 1RQ Ch. 8 - Prob. 2RQ Ch. 8 - Prob. 3RQ Ch. 8 - Provide examples of current liabilities in the...Ch. 8 - Prob. 5RQ Ch. 8 - Prob. 6RQ Ch. 8 - How does commercial paper differ from a normal...Ch. 8 - Prob. 8RQ Ch. 8 - Prob. 9RQ Ch. 8 - Prob. 10RQ

Solution Summary: The author explains that Liabilities are an obligation of the business to pay to creditors in future for goods and services purchased on account or any for other financial benefit received.

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To Record: the revenue on gift cards of $14,000,000 that would be redeemed in December.

the ending balance in the deferred revenue account of Company A.

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Chapter 8 Solutions