Concord Company sells goods that cost $317,500 to Ricard Company
for $400,000 on January 2, 2020. The sales price includes an
installation fee, which has a standalone selling price of $49,500.
The standalone selling price of the goods is $350,500. The
installation is considered a separate performance obligation and is
expected to take 6 months to complete.
(a) Prepare the journal entries (if any) to record
the sale on January 2, 2020. (Credit account titles are
automatically indented when amount is entered. Do not indent
manually. If no entry is required, select "No entry" for the
account titles and enter 0 for the amounts.)
(b) Concord prepares an income statement for the first quarter of 2020, ending on March 31, 2020 (installation was completed on June 18, 2020). How much revenue should Concord recognize related to its sale to Ricard?
| First Quarter | |||
|---|---|---|---|
|
Sales Revenue |
$enter a dollar amount |
||
|
Cost of Goods Sold |
enter a dollar amount |
||
|
Gross Profit |
$enter a total amount for this statement |
| Please hit LIKE button if this helped. For any further explanation, please put your query in comment, will get back to you. | ||||
| Part a | ||||
| Date | Account | Debit | Credit | |
| Jan 2 2020 | Accounts Receivable | $ 400,000 | ||
| Sales Revenue | $ 350,500 | |||
| Unearned Service Revenue | $ 49,500 | |||
| Cost of Good Sold | $ 317,500 | |||
| Inventory | $ 317,500 | |||
| Part b | Sales Revenue | $ 350,500 | ||
| Less: Cost of goods sold | $ (317,500) | |||
| Gross Margin | $ 33,000 | |||
Concord Company sells goods that cost $317,500 to Ricard Company for $400,000 on January 2, 2020....