On January 1, 2014, Gordon Co. enters into a contract to sell a customer a wiring base

Question:

On January 1, 2014, Gordon Co. enters into a contract to sell a customer a wiring base and shelving unit that sits on the base in exchange for $3,000. The contract requires delivery of the base first but states that payment for the base will not be made until the shelving unit is delivered. Gordon identifies two performance obligations and allocates $1,200 of the transaction price to the wiring base and the remainder to the shelving unit. The cost of the wiring base is $700; the shelves have a cost of $320.
Instructions
(a) Prepare the journal entry on January 1, 2014, for Gordon.
(b) Prepare the journal entry on February 5, 2014, for Gordon when the wiring base is delivered to the customer.
(c) Prepare the journal entry on February 25, 2014, for Gordon when the shelving unit is delivered to the customer and Gordon receives full payment?
Fantastic news! We've Found the answer you've been seeking!

Step by Step Answer:

Related Book For  book-img-for-question

Intermediate Accounting 2014 FASB Update

ISBN: 978-1118147290

15th edition

Authors: Donald E. Kieso, Jerry J. Weygandt, Terry D. Warfield

Question Posted: