On August 1, 2008, Flintstone Company sold inventory to Rubble Company for $400,000. This inventory's original...
Fantastic news! We've Found the answer you've been seeking!
Question:
Transcribed Image Text:
On August 1, 2008, Flintstone Company sold inventory to Rubble Company for $400,000. This inventory's original cost was $100,000. The sales contract stipulates that Rubble make a 10% down payment followed by four annual installments on each August 1, beginning August 1, 2009. Flintstone employs a perpetual inventory system under which inventory is decreased by the cost of merchandise sold at time of sale. Required: 1. Prepare the necessary journal entries for 2008 and 2009 using point-of-sale revenue recognition. 2. Repeat requirement 1 using the installment sales method. 3. Repeat requirement 1 using the cost recovery method. 4. Typically, interest charges are also included in financing arrangements like this one between Flintstone and Rubble. How would the consideration of interest impact your answer to requirement 1? On August 1, 2008, Flintstone Company sold inventory to Rubble Company for $400,000. This inventory's original cost was $100,000. The sales contract stipulates that Rubble make a 10% down payment followed by four annual installments on each August 1, beginning August 1, 2009. Flintstone employs a perpetual inventory system under which inventory is decreased by the cost of merchandise sold at time of sale. Required: 1. Prepare the necessary journal entries for 2008 and 2009 using point-of-sale revenue recognition. 2. Repeat requirement 1 using the installment sales method. 3. Repeat requirement 1 using the cost recovery method. 4. Typically, interest charges are also included in financing arrangements like this one between Flintstone and Rubble. How would the consideration of interest impact your answer to requirement 1?
Expert Answer:
Answer rating: 100% (QA)
Step 1 of 22 A Following are revenue recognition methods CompletedT... View the full answer
Related Book For
Intermediate Accounting
ISBN: 978-0078025839
9th edition
Authors: J. David Spiceland, James Sepe , Mark Nelson , Wayne Thomas
Posted Date:
Students also viewed these accounting questions
-
3 0-8 5 and u 1 (a)Write y=w+2, where w is a scalar multiple of u and z is orthogonal to u. (b) Verify your answer as following: (i) w=w+z (ii) w is a scalar multiple of u (iii) w is orthogonal to z....
-
On August 1, 2020, Kazazis Company sold inventory to Magic Company and received Magics 9-month, noninterest-bearing $100,000 note due April 30, 2021. The cash selling price of the inventory was...
-
Using the data in BE7.10, prepare the necessary journal entries required on July 31 for Southco. In BE 7.10 An examination of the company's July bank statement shows a balance of $19,260 on July 31;...
-
Methanol, CH3OH, is prepared industrially from the gasphase catalytic balanced reaction that has been depicted here using molecular models. In a laboratory test, a reaction vessel was filled with...
-
Suppose an element has a valence of 2 and an atomic number of 27. Based only on the quantum numbers, how many electrons must be present in the 3d energy level?
-
(i) Use the data in HPRICE1.RAW to obtain the heteroskedasticity-robust standard errors for equation (8.17). Discuss any important differences with the usual standard errors. (ii) Repeat part (i) for...
-
Identify three selling situations where a memorized sales presentation may be appropriate. Explain why they would be appropriate.
-
Ashley runs a small business in Boulder, Colorado, that makes snow skis. She expects the business to grow substantially over the next three years. Because she is concerned about product liability and...
-
Compute ROA, ROE and ROFL and Interpret the Effects of Leverage Basic income statement and balance sheet information is given below for six different cases. For each case, the assets are financed...
-
Tax Software Assignment - Fall 2023 Ms. Jeanette Letourneau (SIN 123-456-789) was born in Montreal on December 15, 1979. She has spent most of her working life a song writer but also has a part-time...
-
What is being reduced in the below equation.Explain 2Na+ 2HO -> 2NaOH + H
-
"Municipalities in South Africa are faced with a serious challenge of service delivery. It is argued that in some instances this emanates from poor talent management strategies that fail to retain...
-
Brothers Flooring Two brothers, Ali and Abbas Hamdouni have started a flooring business installing tiles, laminate and hardwood floors in residential units. From their start they have been very keen...
-
Change is inevitable in organizations and must be effectively managed by a change agent. Based off your course material, define and identify at least one characteristic of an internal change agent....
-
20 points each 1. Management wants to see all sales for each genre. Required Components: 1) A bar chart depicting Global Sales in million USD versus Genre in the other axis. 2) Display the Sum total...
-
Casius is a boxer who competes in boxing matches organised by "Barnaby's Bouts". During one of Casius fights he suffers a large cut on his forehead from a blow from his opponent in round 2. He later...
-
Stem Games manufactures playing cards. It has three departments: Printing, Cutting & Collating, and Wrapping. Transferred - in costs are considered materials costs. The following information is...
-
-x/2 x/4 If A = -x/2 and A-1 =6 then x equals
-
Described below are three independent and unrelated situations involving accounting changes. Each change occurs during 2018 before any adjusting entries or closing entries are prepared. a. On...
-
In accounting for an operating lease, how are the lessee's and lessor's income statements affected?
-
The comparative balance sheets for 2018 and 2017 are given below for Surmise Company. Net income for 2018 was $50 million. Required: Prepare the statement of cash flows of Surmise Company for the...
-
True or False: Annual worth analysis is the most popular DCF measure of economic worth.
-
Consider a palletizer at a bottling plant that has a first cost of \($150,000,\) operating and maintenance costs of \($17,500\) per year, and an estimated net salvage value of \($25,000\) at the end...
-
True or False: Unless non-monetary considerations dictate otherwise, choose the mutually exclusive investment alternative that has the greatest annual worth over the planning horizon.
Study smarter with the SolutionInn App