Answer:
The revenue from sales to be recognized by Shaw is $390,000
Explanation:
A) Journal entry to record the sale on January 2, 2017
Date Particulars Debit Credit
January 2, 2014 Accounts Receivable $410,000
Sales Revenue $370,000
Unearned Service Rev $40,000
Being the recording of sales and unearned service revenue
Cost of Goods Sold $300,000
Inventory of Merchandise $300,000
B) Shaw should recognise the following Revenue from Sales to Ricard
Sales Revenue $370,000
Service Revenue (3/6 x $40,000) <u>$20,000</u>
Due to the fact that accounts end March 31st, $390,000
2017, only 3 months will be accounted for under
service revenue for the year
Therefor the revenue from sales to be recognized by Shaw is $390,000
