Gamesa’s primary source of revenue is sales of turbines to wind farms. Typically, the contract has two components. First is the sale of the actual turbines, all on credit, with terms never to exceed two years. You may assume that all receivables are collected in accordance with contract terms. 

During 2010, Gamesa will sell 2,950 in turbines on credit, of which 2,000 is due in 2010 , 600 is due in 2011 and 350 is due in 2012. Ending balances on the balance sheet for receivables due in 2011 will be 922 for receivables due in 2012 will be 350. IN addition, Gamesa also signs contracts to provide wind farms in the future. During 2010, Gamesa will sign contracts (but not yet collect cash) to build wind farms in 2011 for 1,500 and in 2012 for 800. 

Prepare the general entries.

Answer rating: 100% (QA)

Debit Cash Credit Revenue Debit Accounts Receivable Credit Revenue ... View the full answer