Question

On January 1, 2020, Flounder Co. enters into a contract to sell a customer a wiring base and shelving unit that sits on the base in exchange for $2,900. The contract requires delivery of the base first but states that payment for the base will not be made until the shelving unit is delivered. Flounder identifies two performance obligations and allocates $1,160 of the transaction price to the wiring base and the remainder to the shelving unit. The cost of the wiring base is $660; the shelves have a cost of $320. Prepare the journal entry on January 1, 2020, for Flounder. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No entry" for the account titles and enter O for the amounts.) Account Titles and Explanation Debit Credit

Answer 1

Answer:

Date	Particulars	Debit ($)	Credit ($)
Jan 1 2020	No entry required
Feb 5 2020	Contract asset	1160
	Sales revenue		1160
	(To record sales revenue)
Feb 5 2020	Cost of goods sold	660
	Inventory		660
	(To record cost of goods sold)
Feb 25 2020	Cash	2900
	Contract asset		1160
	Sales revenue (2900-1160)		1740
	(To record sales)
Feb 25 2020	Cost of goods sold	320
	Inventory		320
	(To record cost of goods sold)