Question #1: Limits Incorporated Limits Incorporated [LI] had the following events occur during 2023: On March 1, 2023, LI signed a contract with a customer AIG Limited to manufacture specialized lawn equipment. The contract was signed for $500,000 and AIG paid $150,000 to LI on the date of the signing. Manufacturing and delivery to AIG is expected to begin in October. On On July 2nd, LI sold $200,000 of lawn equipment to PMG for $320,000 cash. The lawn equipment comes with a one-year warranty. Based on history, warranty is expected to average 2% of the selling price of lawn equipment. On November 3rd, LI delivered $75,000 of lawn equipment to AIG. The cost of the equipment manufactured was $38,000. The lawn equipment carries the same warranty as all other lawn equipment. On December 15th some lawn equipment was returned for repair. The parts needed for repair amounted to $1,200, with $200 of labour being utilized to make the repairs. . Required: Prepare journal entries for ALL the events above (all sales, related cost of sales, etc.). Show all work. Assume perpetual inventory and IGNORE sales taxes.

Question #1: Limits Incorporated Limits Incorporated [LI] had the following events occur during 2023: On March 1, 2023, LI signed a contract with a customer AIG Limited to manufacture specialized lawn equipment. The contract was signed for $500,000 and AIG paid $150,000 to LI on the date of the signing. Manufacturing and delivery to AIG is expected to begin in October. On On July 2nd, LI sold $200,000 of lawn equipment to PMG for $320,000 cash. The lawn equipment comes with a one-year warranty. Based on history, warranty is expected to average 2% of the selling price of lawn equipment. On November 3rd, LI delivered $75,000 of lawn equipment to AIG. The cost of the equipment manufactured was $38,000. The lawn equipment carries the same warranty as all other lawn equipment. On December 15th some lawn equipment was returned for repair. The parts needed for repair amounted to $1,200, with $200 of labour being utilized to make the repairs. . Required: Prepare journal entries for ALL the events above (all sales, related cost of sales, etc.). Show all work. Assume perpetual inventory and IGNORE sales taxes.

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

Chapter17: Advanced Issues In Revenue Recognition

Section: Chapter Questions

Problem 13E: On March 1, 2019, Elkhart enters into a new contract to build a specialized warehouse for 7 million....

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On March 1, 2019, Elkhart enters into a new contract to build a specialized warehouse for 7 million. The promise to transfer the warehouse is determined to be a performance obligation. The contract states that if the warehouse is usable by November 30, 2019, Elkhart will receive a bonus of 600,000. For every week after November 30 that the warehouse is not usable, the bonus will decrease by 150,000. Elkhart provides the following completion schedule: Required: 1. Assume that Elkhart uses the expected value approach. What amount should Elkhart use for the transaction price? 2. Assume that Elkhart uses the most likely amount approach. What amount should Elkhart use for the transaction price? 3. Next Level What is the purpose of assessing whether a constraint on the variable consideration exists?
Current Attempt in Progress On May 1, 2025, Jackson Inc. entered into a contract to deliver one of its specialty mowers to Wildhorse Landscaping Co. The contract requires Wildhorse to pay the contract price of $895 in advance on May 15, 2025. Wildhorse pays Jackson on May 15, 2025, and Jackson delivers the mower (with cost of $557) on May 31, 2025. (a)
On May 1, 2025, Hall Inc. entered into a contract to deliver one of its specialty mowers to Sandhill Landscaping Co. The contract requires Sandhill to pay the contract price of $965 in advance on May 15, 2025. Sandhill pays Hall on May 15, 2025, and Hall delivers the mower (with cost of $651) on May 31, 2025. (a) Prepare the journal entry on May 1, 2025, for Hall. (Credit account titles are automatically indented when the 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. List debit entry before credit entry.) Date Account Titles and Explanation May 1, 2025 eTextbook and Media List of Accounts Save for Later Debit Attempts: 0 of 5 used Credit Submit Answer
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