Questions from Intermediate Accounting

Q: On January 1, 2020, Gordon Co. enters into a

On January 1, 2020, Gordon Co. enters into a contract to sell a customer a wiring base and a shelving unit that sits on the base in exchange for $3,000. The contract requires delivery of the base firs...

Q: On May 1, 2020, Richardson Inc. entered into a

On May 1, 2020, Richardson Inc. entered into a contract to deliver one of its specialty mowers to Kickapoo Landscaping Co. The contract requires Kickapoo to pay the contract price of $900 in advance o...

Q: Omega Pharmaceuticals Inc. licenses its patent rights for North America to

Omega Pharmaceuticals Inc. licenses its patent rights for North America to an approved drug compound for five years to Crane Distributing Ltd. Omega determines that the patented drug formula has signi...

Q: Revenue Recognition under Earnings Approach-Various Consumer Industries Instructions

Revenue Recognition under Earnings Approach-Various Consumer Industries Instructions a. Explain the principles and criteria for revenue recognition under the earnings approach. b. For each scenario no...

Q: To increase sales, Letourneau Inc., a public company following IFRS

To increase sales, Letourneau Inc., a public company following IFRS, implemented a customer loyalty program that rewards a customer with one loyalty point for every $30 of merchandise purchased. Each...

Q: In 2020, Renato Corp. had cash receipts from customers of

In 2020, Renato Corp. had cash receipts from customers of $152,000 and cash payments for operating expenses of $97,000. At January 1, 2020, accounts receivable were $13,000 and total prepaid expenses...

Q: Cramer Corp. sells idle machinery to Enyart Company on July 1

Cramer Corp. sells idle machinery to Enyart Company on July 1, 2020, for $40,000. Cramer agrees to repurchase this equipment from Enyart on June 30, 2021, for a price of $42,400 (an imputed interest r...

Q: Zagat Inc. enters into an agreement on March 1, 2020

Zagat Inc. enters into an agreement on March 1, 2020, to sell aluminum ingots for $200,000 cash to Werner Metal Company. As part of this agreement, Zagat also agrees to repurchase from Werner the ingo...

Q: On December 31, 2020, Grando Company sells production equipment to

On December 31, 2020, Grando Company sells production equipment to Fargo Inc. for $50,000. Grando includes a one-year assurance warranty service with the sale of all its equipment. The customer receiv...

Q: Celie Inc. manufactures and sells computers that include an assurance type

Celie Inc. manufactures and sells computers that include an assurance type warranty for 90 days. Celie offers an optional extended coverage plan under which it will repair or replace any defective par...