Answer:
cash 14,250 debit
unearned revenue 14,250 credit
--sing and payment of the contract--
unearned revenue 14,250 debit
sales revenues 11,640 credit
service revenue 2,910 credit
--accrued revenue for 15 grill sold and installed--
cost of good sold 7,050 debit
Inventory 7,050 credit
--cost of the grill sold in combo --
Explanation:
At May as the owenership/installationwasn't complete. Will be recognizeas unearned revenue.
15 contract x 950 per contract = 14,250 cash proceeds
Now, at recognition a portion of the revenue will be considered services revenue and another sales revenue.
grill sale price 800
installation fee 200
total 1,000
the grill represent 80% of the revenue (800/1,000)
the installation fee 20% (200/1,000)
Thus, 970 x 80% = 776 sales revenue
and 970 x 20% = 194 service fees revenue
We multiply by 15 to get the revenue of these contract:
776 x 15 = 11,640
194 x 15 = 2,910
Cost of goods sold: 15 x 470 = 7,050
