Answer-
a. Prepare the journal entries for Ayayai in 2020.
On July 1, 2020, Ayayai enters into a contract with a customer for the purchase and installation of window for a price of $2,280. No journal entry.
On September 1,2020.
Windows = $2,060
Installation = $630
Total = $2,690
Allocation
Particulars | Amount |
Installation ($630 / $2,690)x $2,280 | 534 |
Windows ($2,060 / $2,690) x $2,280 | 1,746 |
Revenue recognized | 2,280 |
Date | Account details | Debit | Credit |
Sep 1,2020 | Cash | 2,060 | |
Account receivable ($534+$1,746-$2,060) | 220 | ||
unearned service revenue | 534 | ||
Sales revenue | 1,746 | ||
(To record sales) | |||
Cost of goods sold | 1,040 | ||
Inventory | 1,040 | ||
(To record cost of goods sold) | |||
Oct. 1,2020 | Cash | 220 | |
unearned service revenue | 534 | ||
Service revenue (installation) | 534 | ||
Account receivable | 220 | ||
(To record payment received) |
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Exercise 18-11 (Part Level Submission) Ayayai Windows manufactures and sells custom storm windows for three-season porches....
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