Question

Arctic Cat sold Seneca Motor Sports a shipment of snowmobiles that have a fair market value of $38,700. Seneca paid for the snowmobiles on January 1, 2021, with delivery to occur subsequently. Unless informed otherwise, assume that Arctic views the time ey component of this arrangement to be significant, and that the relevant interest rate is 5%. (FV of $1, PV of $1, FVA of $1. PVA of $1, FVAD of $1 and PVAD of $1) (Use appropriate factor(s) from the tables provided.) Required: 1. Assume that, on January 1, 2021, Seneca prepays Arctic for a December 31, 2021 delivery of the snowmobiles. Prepare the journal entry for Arctic to record collection on January 1, 2021, assuming Seneca prepays the present value of the snowmobiles. 2. Prepare the journal entry for Arctic to record delivery of the snowmobiles on December 31, 2021. 3. Assume instead that delivery is to occur on December 31, 2022. Prepare the journal entry for Arctic to record collection on January 1, 2021, assuming Seneca prepays the present value of the snowmobiles. 4. Assume instead that Arctic does not view the time value of money component of this arrangement to be significant. Also assume that, on January 1, 2021, Seneca prepays Arctic for a December 31, 2021 delivery of the snowmobiles, and that Seneca prepays the present value of the snowmobiles. Prepare the journal entry for Arctic to record collection on January 1, 2021. IIIIIIIIIIIIIIIIIIIIIIIIIII (If no entry is required for a transaction/event, select "No journal entry required" in the first account field. Round your final answers to the nearest whole dollar amount.)

Answer 1

Page: No Answer 0 Journal contenu On Jan 1, 2001, Cash = C.. = 5% n = 1 year 38700 X = 38400 X 0.9523809524 - $ 36854 857 Date Debit , Credit Jan', 2021 Particular Cash Debevred orevenue $36854 $36857 ☺ Journal entry On dec 31, 2011) Interest expense = 36857 x 56% &1843 Date - Particular Debit Interest expense $1843 Deberred revenue sales revenue I Gredit dec 31, 2021 $ 36857 $ 38700

Page: No 1 6 Journal entry On Jan, 2021 91=57. = 38 700 X na Qyears) [1+54.) = 38700 X 0.9070294785 Date = $35102 Particular Cash Debored revenue Credit Debit $35102 Jan 2021 $35102 1 Journal entry Cash Dr. = 38900 * *757 38700 X 0.9523809524 = $36857 Date Particular Debit $36857 Coedit - Jan', 2021 Cash Deberred sevenue $3685