The company T ehf. imports and sells household appliances that are in demand by construction contractors and
Question:
The company ÁT ehf. imports and sells household appliances that are in demand by construction contractors and rental companies. The company's product range consists of three products, Product A: standalone price = ISK 65,500. and cost price = ISK 34,100. Product B: independent sale price = ISK 73,300. and cost price = ISK 36,200. Product C: independent sales price = 91,700 ISK. and cost price = ISK 52,400. Buyers can buy each device individually or buy a "Gold Package" but it consists of one unit of product A, one unit of product B, one unit of product C along with the installation of the devices. The price of one "Gold Package" is ISK 230,000. The independent sale price of the installation is ISK 7,500. (installation of each device separately or ISK 22,500 for three devices).
The following needs to be resolved:
Show which entries need to be made in the accounts of ÁT ehf. in the year 2020 due to the following transactions. Be sure to show all dates, names of relevant accounting keys and all figures in whole dollars. Entries may be displayed as T-invoices instead of standard presentation if you prefer.
On March 1, 2020, ÁTehf wrote. under a contract for the sale of 275 "Gold Packs". The buyer, who is a rental company, is building several apartment blocks and can therefore not receive the equipment immediately. According to the agreement, ÁT will therefore store the equipment there, at the buyer's request, until the buyer is ready to receive the equipment, which is expected to be in early August 2020. The buyer paid a 10% confirmation fee when signing the agreement and should pay the balance of the contract 60 days after ÁT can deliver the equipment. Since ÁT ehf. did not have enough equipment in stock, ÁT ehf. to import additional quantities of equipment A and C to fulfill the contract. The equipment arrived at ÁT's warehouse on 15 April 2020 and was immediately installed on pallets marked with the buyer and ready for delivery. ÁT ehf. may not deliver to other purchasers the products contained on these pallets. The buyer requested that the product be delivered on 1 August and that ÁT deliver the equipment that day, but completed the installation on 1 September.
On 1 June 2020, ÁT ehf. under a contract for the delivery of 75 units of the "Gold Package". According to the agreements, the buyer pays 15% of the purchase price at the signing of the agreement and the difference when the equipment has been delivered and installation is completed. ÁT ehf. completed the delivery and installation of the equipment on 1 August 2020 and the buyer paid the balance of the purchase price in accordance with the provisions of the agreement.
On 1 December 2020, ÁT ehf. under an agreement for the sale of 50 units of product C for ISK 4,560,000. and the devices were delivered the same day. According to the agreement, the buyer has a 45-day payment period and a 60-day right of return, provided that the equipment returned is unused. The buyer had not returned any goods by the end of the year. Based on the experience of previous years, the company's sales manager estimates that 6% of the product will be returned.
Can you please put this up in excel and show every calculation, and put behind every account whether it's in balance sheet (BS) or in income statement
Expert Answer:
ANSWER Accounting Entries Date Account Debit Credit March 1 2020 Cash ISK 25200000 Accounts Receivable ISK 25200000 April 15 2020 Inventory ISK 494510... View the full answer
