Green Meadows sells potted plants to gardening shops. On December 6, 2020, Green Meadows enters into...
Homework Answers
The General rule for recognition of revenue is fulfilled on the delivery of the goods. But the transaction where there is a lag between delivery and contract date, the recognition of revenue becomes complex.
SEC has specified 7 criteria, Fulfillment of which is necessary in order to recognize revenue when delivery is still pending.
1. The risk of Ownership must have passed to the buyer.
2. Customer must have made a fixed commitment to purchase the goods
3. The buyer must request the transaction to be on the bill and hold basis.
4. There must be a fixed schedule for the delivery of the goods
5. The seller must have not retained any specific performance obligations such that the earnings process is not complete.
6. The ordered goods must have been segregated from the seller's inventory and not be subject to being used to fill other orders.
7. The equipment or product must be complete and ready for use.
Since both the contracts are made in December 2020 and the deliveries are scheduled which along with other conditions fulfill the revenue recognition criteria.
So, The entire revenue should be booked in December 2020.
= 1100*15 + 400*13
= $21,700
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Green Meadows sells potted plants to gardening shops. On
December 6, 2020, Green Meadows enters into...
HW 5 instructions help Question 12 (of 20) Save & Exit Submit 12. value: 10.00 points...
HW 5 instructions help Question 12 (of 20) Save & Exit Submit 12. value: 10.00 points Green Meadows sells potted plants to gardening shops. On December 6, 2020, Green Meadows enters into a contract with Autumn Leaves to deliver 1,100 potted plants to Autumn Leaves at $15 per pot in three batches. Delivery date December 20, 2020 December 31, 2020 January 16, 2021 Units delivered 600 350 150 On December 20, 2020, Autumn Leaves modifies the scope of the contract...
On December 1, 2020, Legoria Co. decided to hedge against potential fluctuations in the price of...
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On December 1, 2020, Legoria Co. decided to hedge against potential fluctuations in the price of...
On December 1, 2020, Legoria Co. decided to hedge against potential fluctuations in the price of wheat [this wheat is a special type Wheat for PoBoy loaves] for its forecasted purchases in January of 2021 and bought a futures contract entitling and obliging Legoria Co. to purchase 1,000 bushels of wheat on January 2, 2021 for $4.00 per bushel. Since the market price on this date is also $4.00 per bushel, the intrinsic value is zero. Required: 1) Prepare appropriate...
When the contract commenced in June 2019, plant and equipment, costing RM420,000, was sent to the site. This has been revalued at RM400,000 on 31 December 2019. The wages for the last week of December in 2019, RM5,360, was paid in January 2020. As at 31 D
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On December 10, 2020, Robin Franchises, a U.S. company, received a purchase order from a U.K....
On December 10, 2020, Robin Franchises, a U.S. company, received
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on January 15, 2021. The price of the merchandise is £10,000,000,
payable on March 15, 2021, in pounds. To hedge its exposure to
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Hedged Sale Commitment and Exposed Asset Position, with Adjusting Entries On December 10, 2020, Robin Franchises, a U.S. company, received a purchase order from a U.K. customer for delivery of merchandise on January 15, 2021. The price of the merchandise is £10,000,000, payable on March 15, 2021, in pounds. To hedge its exposure to exchange rate changes, on December 10, 2020, Robin entered a forward contract for delivery of £10,000,000 to the broker on March 15, 2021. The merchandise was...
On December 31, 2020, Green Bank enters into a debt restructuring agreement with Shamrock Inc., which...
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The Green Thumb Gardener is a retail store that sells plants, soil, and decorative pots. On...
The Green Thumb Gardener is a retail store that sells plants, soil, and decorative pots. On December 31, 2019, the firm's general ledger contained the accounts and balances that appear below. ACCOUNTS AND BALANCES Cash $ 4,800 Dr. Accounts Receivable 1,700 Dr. Allowance for Doubtful Accounts 43 Cr. Merchandise Inventory 10,400 Dr. Supplies 1,110 Dr. Prepaid Advertising 1,080 Dr. Store Equipment 7,560 Dr. Accumulated Depreciation—Store Equipment 1,410 Cr. Office Equipment 1,060 Dr. Accumulated Depreciation—Office Equipment 190 Cr. Accounts Payable 2,535...
The Green Thumb Gardener is a retail store that sells plants, soil, and decorative pots. On...
The Green Thumb Gardener is a retail store that sells plants, soil, and decorative pots. On December 31, 2019, the firm's general ledger contained the accounts and balances that appear below. ACCOUNTS AND BALANCES Cash $ 5,200 Dr. Accounts Receivable 2,100 Dr. Allowance for Doubtful Accounts 47 Cr. Merchandise Inventory 10,800 Dr. Supplies 1,150 Dr. Prepaid Advertising 960 Dr. Store Equipment 7,800 Dr. Accumulated Depreciation—Store Equipment 1,450 Cr. Office Equipment 1,300 Dr. Accumulated Depreciation—Office Equipment 230 Cr. Accounts Payable 2,575...
The trial balance for Cozy Fireplaces Inc. for December 31, 2020, follows: Credit balances Debit balances...
The trial balance for Cozy Fireplaces Inc. for December 31, 2020, follows: Credit balances Debit balances $ 88,300 38,100 95,400 5,000 46,700 79,800 151,000 $19,635 21,400 Cash Accounts receivable Inventory Supplies Prepaid rent Land Building Accumulated depreciation, building Accounts payable Wages payable Interest payable Income tax payable Unearned revenue Bank loan payable Common shares Retained earnings Sales revenue Cost of goods sold Wages expense Rent expense Supplies expense Depreciation expense Interest expense Miscellaneous expenses Income tax expense Dividends declared 12,500...
HW 5 instructions help Question 12 (of 20) Save & Exit Submit 12. value: 10.00 points Green Meadows sells potted plants to gardening shops. On December 6, 2020, Green Meadows enters into a contract with Autumn Leaves to deliver 1,100 potted plants to Autumn Leaves at $15 per pot in three batches. Delivery date December 20, 2020 December 31, 2020 January 16, 2021 Units delivered 600 350 150 On December 20, 2020, Autumn Leaves modifies the scope of the contract...
On December 1, 2020, Legoria Co. decided to hedge against potential fluctuations in the price of wheat [this wheat is a special type Wheat for PoBoy loaves] for its forecasted purchases in January of 2021 and bought a futures contract entitling and obliging Legoria Co to purchase 1,000 bushels of wheat on January 2, 2021 for $4.00 per bushel. Since the market price on this date is also $4.00 per bushel, the intrinsic value is zero. Required: 1) Prepare appropriate...
On December 10, 2020, Robin Franchises, a U.S. company, received
a purchase order from a U.K. customer for delivery of merchandise
on January 15, 2021. The price of the merchandise is £10,000,000,
payable on March 15, 2021, in pounds. To hedge its exposure to
exchange rate changes, on December 10, 2020, Robin entered a
forward contract for delivery of £10,000,000 to the broker on March
15, 2021. The merchandise was delivered as scheduled. On March 15,
2021, Robin received payment...
On December 31, 2020, Green Bank enters into a debt restructuring agreement with Shamrock Inc., which is now experiencing financial trouble. The bank agrees to restructure a $2.3-million, 10% note receivable issued at par by the following modifications: 1. Reducing the principal obligation from $2.3 million to $2.19 million 2. Extending the maturity date from December 31, 2020, to December 31, 2023 3. Reducing the interest rate from 10% to 8% Shamrock pays interest at the end of each year....
The trial balance for Cozy Fireplaces Inc. for December 31, 2020, follows: Credit balances Debit balances $ 88,300 38,100 95,400 5,000 46,700 79,800 151,000 $19,635 21,400 Cash Accounts receivable Inventory Supplies Prepaid rent Land Building Accumulated depreciation, building Accounts payable Wages payable Interest payable Income tax payable Unearned revenue Bank loan payable Common shares Retained earnings Sales revenue Cost of goods sold Wages expense Rent expense Supplies expense Depreciation expense Interest expense Miscellaneous expenses Income tax expense Dividends declared 12,500...
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