At 6 percent per annum
2 answers:
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<u>Solution and Explanation:</u>
a. Prepare the journal entries for Geraths in 2014.
On July 1, 2014, Geraths enters into a contract with a customer for the purchase and installation of window for a price of $2,400. No journal entry.
On september 1, 2015.
Windows = $2,000
Installation = $600
Total = $2,600
Allocation
<u>Particulars </u> <u>Amount </u>
Installation 554
Windows 1,846
Revenue recognized 2,400
Date Account details Debit Credit
Sep 1,2015 Cash 2,000
Account receivable 400
unearned service revenue 554
Sales revenue 1846
Cost of goods sold 1100
Inventory 110
15 oct,2015 Cash 400
unearned service revenue 554
Service revenue (installation) 554
Account receivable 400
(Revenue recognized after service provided)
<u>On september 1,2015. </u>
Windows = $2,000
Installation = $480
Total = $2,480
Allocation.
sales revenues 200,000
Particulars Amount
Installation 465
Windows 1,935
Revenue recognized 2,400
Date Account details Debit Credit
Sep 1,2015 Cash 2,400
Account receivable 400
unearned service revenue 465
Sales revenue 1935
Cost of goods sold 1100
Inventory 1100
(Windows delivered,Instailation recorded )
15 oct,2015 Cash 400
unearned service revenue 465
Service revenue (installation) 465
Account receivable 400
(Revenue recognized after service provided)