SoccerHawk Merchandise Inc. enters into a 6 month contract to sell soccer balls to City Soccer. The contract contains the following price scale:

On the date the contract is signed, SoccerHawk estimates based on past experience that there is a 20% chance it will sell 450 soccer balls, a 45% chance it will sell 600 soccer balls, and a 25% chance it will sell 800 soccer balls. The company sells the following soccer balls during the 6 month contract:

Required:
1. On the date that the contract is signed should SoccerHawk make a journal entry? Why or why not?
2. Determine the transaction price that SoccerHawk should use when recording monthly revenue ( round your answer to the nearest penny). Round average cost per unit to the nearest cent.
3. Prepare the journal entries for SoccerHawk assuming that City Soccer pays the amount due at the end of each month based on the sales to date.

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Sales VolumePrice per Soccer Bal First 300 soccer balls sold Next 200 soccer balls sold Next 250 soccer balls sold Additional soccer balls sold $22 19 17 15 Number of Soccer Balls Month 1 Month 2 Month 3 Month 4 Month 5 Month 6 Total sales 155 60 125 75 85 60 560 bals