Question

Flint Company sells goods that cost $320,000 to Ricard Company for $403,500 on January 2, 2020. The sales price includes an installation fee, which has a standalone selling price of $38,500. The standalone selling price of the goods is $365,000. The installation is considered a separate performance obligation and is expected to take 6 months to complete. (a) Prepare the journal entries (if any) to record the sale on January 2, 2020. (Credit account titles are automatically indented when 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.) Date Account Titles and Explanation Debit Credit Jan. 2, 2020 (To record sales on account) Jan. 2, 2020 (To record cost of goods aold) (b) Flint prepares an income statement for the first quarter of 2020, ending on March 31, 2020 (installation was completed on June 18, 2020). How much revenue should Flint recognize related to its sale to Ricard? First Quarter Sales Revenue ta Cost of Goods Sold Gross Profit

Answer 1

Answer:

Date	Particulars	Debit ($)	Credit ($)
Jan 2 2020	Accouts receivable	403500
	Sales Revenue		365000
	Unearned Service revenue		38500
	(To record sales on account)
Jan 2 2020	Cost of Goods Sold	320000
	Inventory		320000
	(To record cost of goods sold)

First Quarter
Particulars	Amount
Sales revenue	$365000
Cost of goods sold	$320000
Gross profit	$45000