10. Allen Co. wrote a contract that involves twpip a stand-alone selis would be
ID: 2541351 • Letter: 1
Question
10. Allen Co. wrote a contract that involves twpip a stand-alone selis would be al Co wrote a contract that involves two performance obligations alone selling price of $1 the Product A has a stand- and product B has a stand-alone selling price of $200. The price for is $240. How much of the transaction price would be allocated to the product performance obligation for delivering product A? a. S 40 b. $ 60 c. S 80 d. $100 c. The correct answer is c: 11. Data related to the inventories of Alpine Ski Equipment and Supplies Skis Boots Apparel Supplies Selling price Cost Replacement cost Sales commission Normal gross profit ratio $180,000 $150,000 $120,000 $60,000 128,000 133,000 90,000 45,000 120,000 130,000 110,000 41,000 10% 10% 20% 10% 20% 10% 15% 15% In applying the LCM rule, the inventory of skis would be valued at A. $162,000. B. $128,000. C. $120,000. D. $126,000. Question 12 &13 are based on the following information On January 1, 2018, Emmet entered into a 6-month contract to provide installation service.Under terms of the contract, Emmet will be paid a fixed fee of$30,000 and will receive an additional 15% of the fixed fee at the end of the contract if Emmet receives an average evaluation of "excellent" Emmet determined that this contract qualifies for revenue recognition over time. Assume Emmet estimates variable consideration as the most likely amount 12. On January 31, 2018, Emmet estimates a 30% chance it will earn the bonus. How much revenue should Emmet recognize on this contract in January 2018 a) $5,000 b) $5,225 c) $5,750 d) $30,000 13, On February 28, 2018, Emmet estimates a 60% chance it will earn the bonus. How much revenue should Emmet recognize in February 2018? a. 5,000 b. 5,750 c. 6,500 d. 30,000Explanation / Answer
Solution 5:
Option a is correct.
Explanation:-
Accounts Receivable ................ 7,840
Sales ....................................... 7,840*
8,000 x (1 - 0.02) = 7,840
Solution 6:
Option d is correct.
Explanation: There are five steps to apply the core of revenue recognition includes:- 1. Identify the contract with a customer. 2. Identify the performance obligation(s) in the contract. 3. Determine the transaction price. 4. Allocate the transaction price to the performance obligations. 5. Recognize revenue when (or as) each performance obligation is satisfied. Hence, ensure the sales price is fixed and determinable is not a step.
Solution 7:
Option D is correct.
Explanation:-
Current assets that will become cash are consumed within one year or an operating cycle whichever is greater.
Solution 8:
Option c is correct.
Increase net income in both 2010 and 2011.
Solution 9:
Option B is correct.
Explanation:-
The conceptual framework's qualitative characteristic of faithful representation includes neutrality.
Solution 10:
Option c is correct.
Explanation:
Transaction price = 100/(200 + 100) x $240 = $80
Solution 11:
Option b is correct.
Explanation:-
NRV = $180,000 - ($180,000 x 10%) = $162,000
$128,000 cost is less than $162,000 net realizable value.
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