Kobe Company receives two orders from Windsor Company for products costing $5,000. Answer the following questions about

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Kobe Company receives two orders from Windsor Company for products costing $5,000. Answer the following questions about them:

1. The December 20, 2022, order will not be shipped until January 5, 2023. Kobe Company wants to record the revenue on December 20 so it can include it in the current year’s financial statements. As Kobe’s accountant, you object to this accounting treatment. Why?

2. On December 23, 2022, the order is shipped immediately. Kobe Company pays a commission of 5 percent of the selling price to its sales representative who received the order. This commission will not be paid until January 2023. Kobe’s fiscal year end is December 31. When should the journal entry needed to account for the sales commission be recorded? Explain.

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Related Book For  answer-question

Horngrens Accounting Volume 1

ISBN: 9780136889373

12th Canadian Edition

Authors: Tracie Miller Nobles, Brenda Mattison, Ella Mae Matsumura

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