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polet [3.4K]
3 years ago
11

Windsor Windows manufactures and sells custom storm windows for enclosed porches. Windsor also provides installation service for

the windows. The installation process does not involve changes in the windows, so this service can be provided by other vendors. Windsor enters into the following contraction June 1, 2021, with a local homeowner. The customer purchases windows for a price of $4,700 and chooses Windsor to do the installation. Windsor charges the same price for the windows irrespective of whether it does the installation or not. The price of the installation service is estimated to have a fair value of $1,200. The customer pays Windsor $4,000 (which equals the fair value of the windows, which have a cost of $2,300) upon delivery and the remaining balance upon installation of the windows. The windows are delivered on August 1, 2021, Windsor completes installation on September 15, 2021, and the customer pays the balance due.
Required:
Prepare the journal entries for Windsor in 2018. (Round amounts to the nearest dollar.)
Business
1 answer:
Alina [70]3 years ago
8 0

Answer:

June 1, 2021

No entry – neither party has performed under the contract.

August 1,2021

Dr.  Cash                                        $4,000

Dr.  Accounts Receivable            $700

Cr.  Unearned Service Revenue  $1,085

Cr.  Sales revenue                        $3,615

Dr.  Cost of goods Sold                $2,300

Cr.  Inventory                                 $2,300

Explanation:

As no one performed under the contract on June 1, 2021, so there will be no entry on this day.

On August 1, 2021, Windsor has 2 performance obligations

First: Delivery of the windows

&

Second: Installation of the windows

Fair value of Windows = $4,000

Fair value of Installation services = $1,200

Fair Value of Contract  = $4,000 + $1,200 = $5,200

Allocation of to revenue is based on the ratio of fair value of each performance to the total fair value of contract, As below

Windows  = ($4,000 / $5,200) X $4,700 = $3,615 (round to nearest dollar)

Installation services = ($1,200/$5,200) X $4,700 = $1,085 (round to nearest dollar)

Total Revenue recognized = $4,700

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gayaneshka [121]

Answer:

c. Utilities expense is a mixed cost and rent expense is a fixed cost.

Explanation:

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Direct Materials show variable Costs

Utilities expense show mixed costs

Rent Expense show fixed costs

The correct answer is

c. Utilities expense is a mixed cost and rent expense is a fixed cost.

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3 years ago
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IrinaK [193]

The correct answer is Tax free.

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Answer and Explanation:

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Cash Dr (5,000 × 103) $515,000

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2 years ago
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In 2022, Denise has two children who are qualifying persons for the child and dependent care credit, Ethan and Jeffrey. Ethan has $9,000 in dependent care expenses, and Jeffrey has none. assuming all other tests are met, up to $8,000 of expenses is credited based on.

A federal tax break known as the Child and Dependent Care Credit assists families in paying for childcare costs incurred while working or looking for jobs. Families that are required to pay for the care of an adult dependant or a spouse who is disabled may also be eligible for the credit.

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Marina CMI [18]

Answer:

Above the point bar

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