E18-3. (Existence of a Contract) (LO 1,2) On May 1, 2017, Richardson Inc. entere

Question

E18-3. (Existence of a Contract) (LO 1,2) On May 1, 2017, 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 on May 15, 2017. Kickapoo pays Richardson on May 15, 2017, and Richardson delivers the mower (with cost of $575) on May 31, 2017 Instructions (a) Prepare the journal entry on May 1, 2017, for Richardson. (b) Prepare the journal entry on May 15, 2017, for Richardson. (c) Prepare the journal entry on May 31, 2017, for Richardson.

Explanation / Answer

Journal Entries: Date Accounts title and explanations Debit $ Credit $ 1-May No entry for the agreement. 15-May Cash Account Dr. 900      Unearned revenue 900 31-May Unearned revenue Dr. 900      Sales revenue 900 31-May Cost of Goods sold Dr. 575      Inventory 575

Related Questions

Navigate

• Browse (All)
• Browse E
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.