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    Ade Siti Mariam 183112340350061

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    Shaw Company sells goods to Ricard Company for $410,000, which includes a $40,000 installation fee. The fair value of the goods is $370,000. The installation is a separate performance obligation that will take 6 months to complete. Shaw should recognize $370,000 of revenue initially and $20,000 per quarter for the installation until it is complete after 6 months. Taylor Marina rents boat slips for the season for €800 each. In 2015, all 300 slips for 2015 were pre-paid. In 2015, 200 slips for 2016 and 60 slips for 2017 were also pre-paid with discounts for early payment. This generated €190,400 in advance cash flows in

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    Ade Siti Mariam 183112340350061

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    Ade siti m
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    Shaw Company sells goods to Ricard Company for $410,000, which includes a $40,000 installation fee. The fair value of the goods is $370,000. The installation is a separate performance obligation that will take 6 months to complete. Shaw should recognize $370,000 of revenue initially and $20,000 per quarter for the installation until it is complete after 6 months. Taylor Marina rents boat slips for the season for €800 each. In 2015, all 300 slips for 2015 were pre-paid. In 2015, 200 slips for 2016 and 60 slips for 2017 were also pre-paid with discounts for early payment. This generated €190,400 in advance cash flows in

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    Shaw Company sells goods to Ricard Company for $410,000, which includes a $40,000 installation fee. The fair value of the goods is $370,000. The installation is a separate performance obligation that will take 6 months to complete. Shaw should recognize $370,000 of revenue initially and $20,000 per quarter for the installation until it is complete after 6 months. Taylor Marina rents boat slips for the season for €800 each. In 2015, all 300 slips for 2015 were pre-paid. In 2015, 200 slips for 2016 and 60 slips for 2017 were also pre-paid with discounts for early payment. This generated €190,400 in advance cash flows in

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Download as docx, pdf, or txt
    124 views2 pages

    Ade Siti Mariam 183112340350061

    Uploaded by

    Ade siti m
    Shaw Company sells goods to Ricard Company for $410,000, which includes a $40,000 installation fee. The fair value of the goods is $370,000. The installation is a separate performance obligation that will take 6 months to complete. Shaw should recognize $370,000 of revenue initially and $20,000 per quarter for the installation until it is complete after 6 months. Taylor Marina rents boat slips for the season for €800 each. In 2015, all 300 slips for 2015 were pre-paid. In 2015, 200 slips for 2016 and 60 slips for 2017 were also pre-paid with discounts for early payment. This generated €190,400 in advance cash flows in

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Download as docx, pdf, or txt
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    Ade Siti Mariam

    183112340350061
    SOAL DAN JAWABAN
    Soal
    E18-10 (Allocate Transaction Price) Shaw Company sells goods that cost $300,000 to Ricard
    Company for $410,000 on January 2, 2015. The sales price includes an installation fee, which is
    valued at $40,000. The fair value of the goods is $370,000. The installation is considered a
    separate performance obligation and is expected to take 6 months to complete.
    Instructions :
    (a) Prepare the journal entries (if any) to record the sale on January 2, 2015.

    Accounts Receivable $ 410,000


    Sales Revenue $ 370,000
    Unearned Service Revenue 40,000
    (b) Shaw prepares an income statement for the first quarter of 2015, ending on March 31,
    2015 (installation was completed on June 18, 2015). How much revenue should Shaw recognize
    related to its sale to Ricard?

    Sales Revenue $ 370,000


    Service Revenue (Installation - $ 40,000 x 3/6) 20,000
    Total Revenue $ 390,000
    E18-8 (Sales with Discounts) Taylor Marina has 300 available slips that rent for €800 per
    season. Payments must be made in full at the start of the boating season, April 1, 2015. The
    boating season ends October 31, and the marina has a December 31 year-end. Slips for future
    seasons may be reserved if paid for by December 31, 2015. Under a new policy, if payment for
    2016 season slips is made by December 31, 2015, a 5% discount is allowed. If payment for 2017
    season slips is made by December 31, 2015, renters get a 20% discount (this promotion
    hopefully will provide cash flow for major dock repairs). On December 31, 2014, all 300 slips
    for the 2015 season were rented at full price. On December 31, 2015, 200 slips were reserved
    and paid for the 2016 boating season, and 60 slips were reserved and paid for the 2017 boating
    season.
    Instructions
    (a) Prepare the appropriate journal entries for December 31, 2015, and December 31,
    2016.

    December 31, 2015


    Cash € 240,000
    Unearned Rent Revenue € 240,000
    (300 x €800)
    December, 31 2016
    Cash € 152,000
    Unearned Rent Revenue € 152,000
    ( 200 x €800 x (1.00 – 0.05))
    2017
    Cash € 38,400
    Unearned Rent Revenue € 38,400
    ( 60 x €800 x (1.00 – 0.20))
    (b) Assume the marina operator is unsophisticated in business. Explain the managerial
    significance of the above accounting to this person.

    The marina operator should recognize that advance rentals generated €190,400 (€152,000 -
    €38,400) of cash in exchange for the marina’s promiseto deliver future services. In effect, this
    has reduced future cash flow by accelerating payments from boat owners. Also, the price of
    rental services has effectively been reduced.

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