Question

Application Problem 4-5A a1, b-c (Part Level Submission) Cool-IT Ltd. manufactures and sells air conditioning equipment to retailers across North America. In 2020, Cool-IT signed a two-year contract with BigMart Ltd. to supply it with 63,300 units at a price of $78 per unit. Cool-IT's cost to manufacture these units is $51. The following schedule summarizes the production, delivery, and payments in relation to the contract. Production costs are recorded to inventory: Air conditioning units delivered Production costs incurred Cash payments received 2020 41,500 $2,116,500 $2,780,000 2021 21,800 $1,111,800 $1,868,400 Total 63,300 $3,228,300 $4,648,400 (a1) Your answer is correct. Determine how much revenue Cool-IT would be able to recognize in 2020 and 2021. 5 Revenue recognized in 2020 3237000 Revenue recognized in 2021 del 1700400

ANSWER PART C ( WITH FULL STEPS PLEASE)

Answer 1

(c)

Date	Account Titles and Explanation	Debit	Credit
2020	Accounts receivable (41500 x $78)	3237000
	Refund liability (2% x $3237000)		64740
	Sales revenue		3172260
	(To record sales revenue)
	Cost of goods sold	2116500
	Inventory		2116500
	(To record cost of goods sold)
	Cash	2780000
	Accounts receivable		2780000
	(To record collections on account)
2021	Accounts receivable (21800 x $78)	1700400
	Refund liability (2% x $1700400)		34008
	Sales revenue		1666392
	(To record sales revenue)
	Cost of goods sold	1111800
	Inventory		1111800
	(To record cost of goods sold)
	Cash	1868400
	Accounts receivable		1868400
	(To record collections on account)