In September 2019, Gaertner Corp. commits to selling 150 of its iPhone-compatible docking stations to Better Buy

Question:

In September 2019, Gaertner Corp. commits to selling 150 of its iPhone-compatible docking stations to Better Buy Co. for $15,000 ($100 per product). The stations are delivered to Better Buy over the next 6 months. After 90 stations are delivered, the contract is modified and Gaertner promises to deliver an additional 45 products for an additional $4,275 ($95 per station). All sales are cash on delivery.

Instructions

a. Prepare the journal entry for Gaertner for the sale of the first 90 stations. The cost of each station is $54.

b. Prepare the journal entry for the sale of 10 more stations after the contract modification, assuming that the price for the additional stations reflects the standalone selling price at the time of the contract modification. In addition, the additional stations are distinct from the original products as Gaertner regularly sells the products separately.

c. Prepare the journal entry for the sale of 10 more stations (as in (b)), assuming that the pricing for the additional products does not reflect the standalone selling price of the additional products and the prospective method is used.

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a Cash 9000 Sales Revenue 90 X 100 9000 Cost of Goods Sold 4860 Inventory 90 X 54 4860 b Cash 1000 S...View the full answer

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Related Book For book-img-for-question

Intermediate Accounting IFRS

ISBN: 978-1119372936

3rd edition

Authors: Donald E. Kieso, Jerry J. Weygandt, Terry D. Warfield

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Question Posted: Nov 23, 2017 09:29 AM

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In September 2019, Gaertner Corp. commits to selling 150 of its iPhone-compatible docking stations to Better Buy

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a Cash 9000 Sales Revenue 90 X 100 9000 Cost of Goods Sold 4860 Inventory 90 X 54 4860 b Cash 1000 S...View the full answer

Intermediate Accounting IFRS

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