PROBLEM TWO Part A: Revenue Recognition = Loyola Company, a kitchen appliances manufacturer sells 10 washing machines to a dealer for $30,000 in one signed contract. Additionally, Loyola Company offered a $500 cash incentive (price reduction per machine purchased) to the dealer for all machines purchased within two weeks leading to the July 4 holiday. The sale includes three years of maintenance for each of the machines. The standalone selling price of the washing machines is $30,000 and the standalone selling price of the maintenance contract is $2,000. Loyola company purchased the machines at a combined total of $25,000. In answering the following questions, round each amount to the nearest whole dollar. Instructions 1. How many performance obligations are in this contract? 2. Allocate the transaction price to the performance obligations identified in #1 assuming the machines were sold on July 1" (within the offer time).

PROBLEM TWO Part A: Revenue Recognition = Loyola Company, a kitchen appliances manufacturer sells 10 washing machines to a dealer for $30,000 in one signed contract. Additionally, Loyola Company offered a $500 cash incentive (price reduction per machine purchased) to the dealer for all machines purchased within two weeks leading to the July 4 holiday. The sale includes three years of maintenance for each of the machines. The standalone selling price of the washing machines is $30,000 and the standalone selling price of the maintenance contract is $2,000. Loyola company purchased the machines at a combined total of $25,000. In answering the following questions, round each amount to the nearest whole dollar. Instructions 1. How many performance obligations are in this contract? 2. Allocate the transaction price to the performance obligations identified in #1 assuming the machines were sold on July 1" (within the offer time).

Intermediate Accounting: Reporting And Analysis

3rd Edition

ISBN:9781337788281

Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Chapter9: Current Liabilities And Contingent Obligations

Section: Chapter Questions

Problem 16P: Premium Obligation Yummy Cereal Company is offering one toy shovel set for 15 box tops of its...

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Problem 2: JIN Corporation started a promotional program. A towel is offered as a premium to customers who send in 10 box tops of facial soap returned and a remittance of P25. Distribution cost is P10 per towel. The entity estimated that only 60% of the box tops reaching the market will be redeemed. The entity provided the following information: 2020 2021 Facial soap sales, P50 per unit Towel purchases, P90 per unit Number of box tops returned 2,500,000 2,875,000 337,500 360,000 38,550 22,500 Requirements: 4. Compute for the premiums (as an asset) amount for the year ended: A. December 31, 2020 B. December 31, 2021 2 AE211: Intermediate Acctg. 2 Prepared by: Bernadette Adelaida M. Cope 5. Compute for the premiums expense for the year ended: A. December 31, 2020 B. December 31, 2021 6. Compute for the premium liability for the year ended: A. December 31, 2020 B. December 31, 2021 7. How much net cash did the entity receive (give) with regards to the premium transactions for the year…
Problem 2: JIN Corporation started a promotional program. A towel is offered as a premium to customers who send in 10 box tops of facial soap returned and a remittance of P25. Distribution cost is P10 per towel. The entity estimated that only 60% of the box tops reaching the market will be redeemed. The entity provided the following information: 2020 2021 Facial soap sales, P50 per unit Towel purchases, P90 per unit Number of box tops returned 2,500,000 2,875,000 337,500 360,000 22,500 38,550 Requirements: How much net cash did the entity receive (give) with regards to the premium transactions for the year given below? (if net cash outflow, put a negative (-) sign before the numerical figure. A. December 31, 2020 B. December 31, 2021 7.
Problem 2: JIN Corporation started a promotional program. A towel is offered as a premium to customers who send in 10 box tops of facial soap returned and a remittance of P25. Distribution cost is P10 per towel. The entity estimated that only 60% of the box tops reaching the market will be redeemed. The entity provided the following information: 2020 2021 Facial soap sales, P50 per unit Towel purchases, P90 per unit Number of box tops returned 2,500,000 2,875,000 337,500 360,000 22,500 38,550 Requirements: 5. Compute for the premiums expense for the year ended: A. December 31, 2020 B. December 31, 2021
28 Neakanie Industries sells specialized mountain bikes. Each specialized bike purchased includes free maintenance service for 12 months. The price of the specialized bike is $700. When sold separately, a maintenance contract is $200, and a comparable but non-specialized bike is $600. If Neakanie sold 3 bikes on December 1, how much total revenue would the company recognize on December 31? Multiple Choice $2,937.50. $2,250.00. $1,618.75. $250.00.
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