Exercise 18-11 Headland Windows manufactures and sells custom storm windows for

Question

Exercise 18-11 Headland Windows manufactures and sells custom storm windows for three-season porches. Headland also provides installation service for the windows. The installation process doe not involve changes in the windows, so this service can be performed by other vendors. Headland enters into the following contract on July 1, 2017, with a local homeowner. The customer purchases windows for a price of $2,420 and chooses Headland to do the installation. Headand charges the same price for the windows irrespective of whether it does the nstallation or not. The installation service is estimated to have a stándalone selling price of $580. The customer pays Headland $1,920 (which equals the standalone selling price of the windows, which have a cost of $1,100) upon delivery and the remaining balance upon installation of the windows. The windows are delivered on September 1, 2017, Headland completes installation on October 15, 2017, and the customer pays the balance due. Your answer is partially correct. Try again. Headland estimates the standalone selling price of the installation based on an estimated cost of S460 plus a margin of 20% on cost. Prepare the journal entries for Headland in 2017. (Credit account titles are automatically indented when the amount is entered. Do not Indent manually. If no entry is required, select "No entry" for the account titles and enter O for the amounts. Round answer to 0 decimal places, e.g. 5,125.) Date Account Titles and Explanation Debit Credit ul. 1, 2017 No Entry No Entry (To record contract entered into) Sep. 1, 2017

Explanation / Answer

Sep 1= unearned service revenue $580

Sales revenue $1840

Because the the service that is not been earned upto 1 sep but it is not a separate figure on the window. The charges of installation is included in window.

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