On March 15, 2020, Drexel Corp provides goods to a retailer through consignment where Drexel Corp....

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On March 15, 2020, Drexel Corp provides goods to a retailer through consignment where Drexel Corp. retains ownership of the goods until the goods are sold to the retailer's customer. Sale to the final customer is docu- mented when the goods are scanned at the cash register of the retailer. Drexel Corp. receives a daily report on the number of units sold by the retailer to the end customer. Any unsold product can be returned to Drexel Corp. at any time. Drexel Corp. has the right through the contract to recall any goods shipped and to transfer the goods to another retailer as a way to increase the rate of sales to the final customer. After the sale of the products to the final customer, the retailer cannot return the items to Drexel Corp. During March of 2020, Drexel Corp. transferred 1,200 units to the retailer, and the retailer sold 1,000 units. The product cost Drexel Corp. $80 per unit and the product was sold for $115 per unit to the end customer. The retailer sent a payment to Drexel Corp. for the cash collected on the sale of product less a 10% commission on April 7, 2020. Required a. At what date should Drexel Corp. recognize revenue? Explain b. Record Drexel's entries on March 15, 2020, March 31, 2020, and April 7, 2020. Answer the requirements for each of the following separate revenue arrangements. a On December 31, 2020, Quality Wholesalers Inc. sold merchandise to a retailer with payment terms net 30. The merchandise is clearly segregated in Wholesalers Inc.'s distribution center, ready for shipment to the customer, but the units are not scheduled to ship until March 1, 2021 (or earlier if requested by retailer). Due to structural damage from a fire at one of the retailer's locations, the retailer does not currently have the ca- pacity to hold the merchandise, but would like to have the merchandise available if needed. Determine (1) the type of complex revenue arrangement, and (2) the date that Quality Wholesalers Inc. should record the sale of the merchandise to its customer. b. On February 1, 2020, Atlanta Inc. sells equipment to Raleigh Inc. for $200,000. As stipulated in the revenue contract, Raleigh Inc. can sell back the equipment on December 31, 2020, for $15,000. (The expected value of the equipment at that time is $20,000.) The relevant interest rate is 7%. Determine (1) the type of complex revenue arrangement, and (2) the amount of revenue that Atlanta Inc should record on February 1, 2020. c. On April 1, 2020, Container Store Inc. shipped merchandise to Office Plus Inc. with a sales value of $15,000. Container Store Inc. entered into a contract with Office Plus Inc. in which it only is responsible for purchas- ing the merchandise that it ultimately sells to its customers. Any unsold merchandise can be returned to Con- tainer Store Inc. at no cost to Office Plus Inc. and Container Store Inc. can request return of merchandise held by Office Plus Inc. at any time. For the month of April, Office Plus Inc. sold $10,000 of the shipped merchandise and paid Packaging Plus Inc. for the purchase electronically on April 30, 2020. Determine (1) the type of complex revenue arrangement, and (2) the amount of revenue that Container Store Inc. should record in April 2020. d. My Tickets Inc. facilitates the purchase of concert tickets to customers through its vast social media network. My Tickets Inc. has access to blocks of tickets from a large number of vendors that are advertised through its network. When a customer purchases a ticket, My Tickets Inc. electronically forwards the payment to the vendor, less a commission of 15%. Any issues with the performances associated with the tickets are man- aged by the vendors. In March of 2020, My Tickets Inc. sold tickets worth $45,000, of which $8,000 of the concerts have not yet taken place. Determine (1) the type of complex revenue arrangement, and (2) how much revenue My Tickets Inc. reports in March of 2020. F A On March 15, 2020, Drexel Corp provides goods to a retailer through consignment where Drexel Corp. retains ownership of the goods until the goods are sold to the retailer's customer. Sale to the final customer is docu- mented when the goods are scanned at the cash register of the retailer. Drexel Corp. receives a daily report on the number of units sold by the retailer to the end customer. Any unsold product can be returned to Drexel Corp. at any time. Drexel Corp. has the right through the contract to recall any goods shipped and to transfer the goods to another retailer as a way to increase the rate of sales to the final customer. After the sale of the products to the final customer, the retailer cannot return the items to Drexel Corp. During March of 2020, Drexel Corp. transferred 1,200 units to the retailer, and the retailer sold 1,000 units. The product cost Drexel Corp. $80 per unit and the product was sold for $115 per unit to the end customer. The retailer sent a payment to Drexel Corp. for the cash collected on the sale of product less a 10% commission on April 7, 2020. Required a. At what date should Drexel Corp. recognize revenue? Explain b. Record Drexel's entries on March 15, 2020, March 31, 2020, and April 7, 2020. Answer the requirements for each of the following separate revenue arrangements. a On December 31, 2020, Quality Wholesalers Inc. sold merchandise to a retailer with payment terms net 30. The merchandise is clearly segregated in Wholesalers Inc.'s distribution center, ready for shipment to the customer, but the units are not scheduled to ship until March 1, 2021 (or earlier if requested by retailer). Due to structural damage from a fire at one of the retailer's locations, the retailer does not currently have the ca- pacity to hold the merchandise, but would like to have the merchandise available if needed. Determine (1) the type of complex revenue arrangement, and (2) the date that Quality Wholesalers Inc. should record the sale of the merchandise to its customer. b. On February 1, 2020, Atlanta Inc. sells equipment to Raleigh Inc. for $200,000. As stipulated in the revenue contract, Raleigh Inc. can sell back the equipment on December 31, 2020, for $15,000. (The expected value of the equipment at that time is $20,000.) The relevant interest rate is 7%. Determine (1) the type of complex revenue arrangement, and (2) the amount of revenue that Atlanta Inc should record on February 1, 2020. c. On April 1, 2020, Container Store Inc. shipped merchandise to Office Plus Inc. with a sales value of $15,000. Container Store Inc. entered into a contract with Office Plus Inc. in which it only is responsible for purchas- ing the merchandise that it ultimately sells to its customers. Any unsold merchandise can be returned to Con- tainer Store Inc. at no cost to Office Plus Inc. and Container Store Inc. can request return of merchandise held by Office Plus Inc. at any time. For the month of April, Office Plus Inc. sold $10,000 of the shipped merchandise and paid Packaging Plus Inc. for the purchase electronically on April 30, 2020. Determine (1) the type of complex revenue arrangement, and (2) the amount of revenue that Container Store Inc. should record in April 2020. d. My Tickets Inc. facilitates the purchase of concert tickets to customers through its vast social media network. My Tickets Inc. has access to blocks of tickets from a large number of vendors that are advertised through its network. When a customer purchases a ticket, My Tickets Inc. electronically forwards the payment to the vendor, less a commission of 15%. Any issues with the performances associated with the tickets are man- aged by the vendors. In March of 2020, My Tickets Inc. sold tickets worth $45,000, of which $8,000 of the concerts have not yet taken place. Determine (1) the type of complex revenue arrangement, and (2) how much revenue My Tickets Inc. reports in March of 2020. F A

Answer rating: 100% (QA)

a Quality Wholesalers Inc December 31 2020 No journal entry required as control has not transfe... View the full answer