Equipment Inc. sells machinery to a customer for $1 million payable in 6 months. At the...
Fantastic news! We've Found the answer you've been seeking!
Question:
Transcribed Image Text:
Equipment Inc. sells machinery to a customer for $1 million payable in 6 months. At the inception of the contract, Equipment Inc. believes that it is likely that the customer will not pay the full contract price due to a possible price concession. The customer has been offered up to a $230,000 price concession if it provides demonstrations of the equipment to potential customers of Equipment Inc. Equipment Inc. estimates that the customer will pay at least $770,000, which is sufficient to cover Equipment Inc.'s cost of sales. Equipment Inc. is interested in the contract and thus willing to accept the lower contract price because it wants to grow its presence in this market. Equipment Inc. concludes it is probable it will collect $770,000. Required Determine the transaction price for revenue recognition for the seller. Equipment Inc. sells machinery to a customer for $1 million payable in 6 months. At the inception of the contract, Equipment Inc. believes that it is likely that the customer will not pay the full contract price due to a possible price concession. The customer has been offered up to a $230,000 price concession if it provides demonstrations of the equipment to potential customers of Equipment Inc. Equipment Inc. estimates that the customer will pay at least $770,000, which is sufficient to cover Equipment Inc.'s cost of sales. Equipment Inc. is interested in the contract and thus willing to accept the lower contract price because it wants to grow its presence in this market. Equipment Inc. concludes it is probable it will collect $770,000. Required Determine the transaction price for revenue recognition for the seller.
Expert Answer:
Answer rating: 100% (QA)
The scenario provided describes a situation where Equipment Inc sells machinery to a customer with a ... View the full answer
Related Book For
Financial Reporting Financial Statement Analysis and Valuation a strategic perspective
ISBN: 978-1337614689
9th edition
Authors: James M. Wahlen, Stephen P. Baginski, Mark Bradshaw
Posted Date:
Students also viewed these accounting questions
-
Planning is one of the most important management functions in any business. A front office managers first step in planning should involve determine the departments goals. Planning also includes...
-
Managing Scope Changes Case Study Scope changes on a project can occur regardless of how well the project is planned or executed. Scope changes can be the result of something that was omitted during...
-
TCP: the client sends only 1 message to the server hello from TCP Client and the server responds with the uppercase message. Update the program / make a simple chat program so that The client can...
-
Give the IUPAC name for each of the following compounds: (a) CH3 (CH2)25CH3 (b) (CH3)2CHCH2 (CH2)14CH3 (c) (CH3CH2)3CCH (CH2CH3)2
-
A shipping crate that weighs 450 kg is placed on a loading ramp that makes an angle of 30 with the horizontal. Find the magnitude of the components of the crates weight perpendicular to and parallel...
-
If a patient receives a series of jolts, the resistance of the torso may increase. How does such a change affect the initial current and the time constant of subsequent jolts? A. The initial current...
-
Journalize the following transactions in a general journal: May 3 Purchased merchandise from Cintron, $6,500. Invoice No. 321, dated May 1, terms n/30. 9 Purchased merchandise from Mitsui, $2,300....
-
Social workers whose personal problems, psychosocial distress, legal problems, substance abuse, or mental health difficulties interfere with their professional judgment and performance should...
-
Gary Hudson was born and raised in Pensacola, Florida. He obtained his bachelors degree in business from Florida State University, where he enrolled in the NROTC (Naval Reserve Officers Training...
-
Convert the following integers to a decimal expansion. a) (1 1011)2 b) (10 1011 0101) z c) (11 1011 1110) d) (120)s e) (FEF) 16
-
What is the 1year futures value for a stock with spot price of $200. Assume the one-year T-bill rate is 3% and dividend yield is 2%. All the rates are continuously compounded. If possible, conduct an...
-
O Consider the following information: State Boom Probability .25 Normal .50 Slowdown .15 Recession .10 KX, Inc. (%) 15 8 4 -3 What is the expected return? What is the variance? What is the...
-
How much would you loan your brother-in-law if he said he could repay you $200 in six months, $400 in a year, and $700 in two years if you can get 3 percent interest from the bank on a six month CD?...
-
The payback period is the length of time it takes an investment to generate sufficient cash flows to enable the project to: produce a positive annual cash flow. produce a positive cash flow from...
-
In 2021, Beximco Limited paid Tk 4 per share as dividend to its shareholders. The companys dividends are expected to grow at 10% annually for the next 3 years. Thereafter, the dividend of the company...
-
1. The principles of calculus, historically, are differentials and integrals [1], while those of algebra are operators and equation solving [2]. Contemporary principles are analysis and abstract...
-
Describe a job you have had in the past or a job you are very familiar with. Indicate the negative aspects of the job and how it could be improved with current human resource management techniques.
-
Identify three economic factors that will drive a firms value-to-book ratio to decrease over time. Identify three accounting factors that will drive a firms value-to-book ratio to decrease over time.
-
Nike, Inc.s principal business activity involves the design, development, and worldwide marketing of athletic footwear, apparel, equipment, accessories, and services for serious and recreational...
-
Vulcan Materials Company, a member of the S&P 500 Index, is the nations largest producer of construction aggregates, a major producer of asphalt mix and concrete, and a leading producer of cement in...
-
Find the two eigenvalues of an operator associated with a \(2 \times 2\) matrix with arbitrary elements.
-
Discretize the product of two functions, as compared to discretizing each function independently, and describe what that means in the language of kets.
-
Suppose that the probability of finding some particle 1 at \(x_{1}\) is a Gaussian around \(x_{1}\), with standard deviation \(\sigma_{1}\), and the probability of finding another particle 2 at...
Study smarter with the SolutionInn App