Presented below are three independent revenue arrangements for Colbert Company. The company follows IFRS. Instructions Respond to

Fantastic news! We've Found the answer you've been seeking!

Question:

Presented below are three independent revenue arrangements for Colbert Company. The company follows IFRS.

Instructions

Respond to the requirements related to each revenue arrangement.

a. Colbert sells 3-D printer systems. Recently, Colbert provided a special promotion of zero-interest financing for two years on any new 3-D printer system. Assume that Colbert sells Lyle Cartright a 3-D system, receiving a $5,000 zero-interest-bearing note on January 1, 2020. The cost of the 3-D printer system is $4,000. Colbert imputes a 6% interest rate on this zero-interest note transaction. Prepare the journal entry to record the sale on January 1, 2020, and calculate the total amount of revenue to be recognized in 2020.

b. Colbert sells 20 non-refundable $100 gift cards for 3-D printer plastic on March 1, 2020. The plastic has a stand-alone selling price of $100 (cost $80). The gift card expiration date is June 30, 2020. Colbert estimates that customers will not redeem 10% of these gift cards. The pattern of redemption is as follows.

? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ?Cumulative Redemption Rate to DateMarch 31 ........................................... 50%April 30 .............................................. 80%June 30 .............................................. 85%

Prepare the 2020 journal entries related to the gift cards at March 1, March 31, April 30, and June 30. Round amounts to the nearest dollar.

c. Colbert sells 3-D printers along with a number of retail items. The package price and stand-alone selling prices of each item are as follows. The printer and stand are often sold as a bundle with the bundling discount noted below.

Due to the timing of the delivery?the plastic is delivered six months after the printer is delivered to the customer?Colbert chooses to account for two performance obligations: (1) the printer and stand, and (2) the plastic. Prepare the journal entries for Colbert on (a) March 1, 2020, when Colbert receives $51,250 for the sale of 10 printer bundles, and (b) September 1, 2020, when the plastic is delivered to customers.