Iceland Company sells freezer and refrigerator assemblies, providing equipment, accessories, and installation services for housing contractors. Respond
Question:
1. Iceland offers a stand-alone freezer and refrigerator package, plus installation, for a total price $2,700. On its own, the freezer sells for $1,350 (cost $735) and the refrigerator sells for $1,500 (cost $790). Iceland estimates that price of the installation service on a standalone basis is $180. Iceland sold 10 of these packages on 4/21/21, receiving the contract price in cash. The units were delivered on 5/1/21 and installed on 5/15/21. Prepare journal entries for Iceland for April and May 2021.
2. On 6/1/21, Iceland sold one of its freezer and refrigerator packages to a struggling local builder and accepted a 3-year, zero-interest-bearing note with a face amount of $3,220. The package was delivered and installed on 6/15/21. Prepare all of the journal entries required in 2021 with respect to this contract.
3. Iceland sells certain specialty combination freezer/refrigerators to some contractors for $2,250 (cost $1,425) on credit with terms 3/30, net/90. Prepare the journal entries for the sale and delivery of 20 of these combination sets on 8/21/21, and upon payment, assuming the customer paid on (1) 9/15/21, and (2) 10/25/21. Iceland records sales net.
Intermediate Accounting
ISBN: 978-1118742976
16th edition
Authors: Donald E. Kieso, Jerry J. Weygandt, Terry D. Warfield