Use the following facts of Lilac Corporation to prepare its journal entries relating to the
(a) Manufacturing of inventory,
(b) Revenue recognition during production,
(c) Partial billing,
(d) Cash collection.
• The company contracts to produce and sell an item of inventory to a customer for $250. It costs $150 cash to manufacture the item.
• The company sells the item on credit.
• During production, the company bills the customer for a partial billing of $210.
• The company collects $80 cash from the customer in partial payment.
• Assume that the company has not yet delivered the item to its customer, but advances the recognition of revenue to the period of production.