Peachpit Software Developers shipped its accounting package to a customer on September 10, 20X1. In addition...
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Peachpit Software Developers shipped its accounting package to a customer on September 10, 20X1. In addition to the software, Peachpit's contract requires the company to provide: (1) training to the customer's accounting staff during October of 20X1 and again in January 20X2 when the upgrade is released-75% of the training hours are provided during October, (2) technical product support for one year starting October 1, 20X1, and (3) a major upgrade to the software early in 20X2. The customer paid the total contract price of $80,000 upon receipt of the invoice on September 17, 20X1. Peachpit would charge the following if these individual contract elements were sold separately: Accounting package (software) Training customer's staff Customer support. Accounting software upgrade Totals Fair Value $ 65,000 10,000 15,000. 10,000 $100,000 D Required: a. Prepare a journal entry to record receipt of the cash payment. b. Determine the amount of revenue to be recognized in 20X1 and prepare the necessary journal entry. Peachpit Software Developers shipped its accounting package to a customer on September 10, 20X1. In addition to the software, Peachpit's contract requires the company to provide: (1) training to the customer's accounting staff during October of 20X1 and again in January 20X2 when the upgrade is released-75% of the training hours are provided during October, (2) technical product support for one year starting October 1, 20X1, and (3) a major upgrade to the software early in 20X2. The customer paid the total contract price of $80,000 upon receipt of the invoice on September 17, 20X1. Peachpit would charge the following if these individual contract elements were sold separately: Accounting package (software) Training customer's staff Customer support. Accounting software upgrade Totals Fair Value $ 65,000 10,000 15,000. 10,000 $100,000 D Required: a. Prepare a journal entry to record receipt of the cash payment. b. Determine the amount of revenue to be recognized in 20X1 and prepare the necessary journal entry.
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a Journal entry for the receipt of cash payment Account titles ... View the full answer
Related Book For
Financial Reporting and Analysis
ISBN: 978-0078025679
6th edition
Authors: Flawrence Revsine, Daniel Collins, Bruce, Mittelstaedt, Leon
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