1. Crane Appliance Center is an experienced home appliance dealer. Crane Appliance Center also offers a number of services for the home appliances that it sells. Assume that Crane Appliance Center sells ovens on a standalone basis. Crane Appliance Center also sells installation services and maintenance services for ovens. However, Crane Appliance Center does not offer installation or maintenance services to customers who buy ovens from other vendors. Pricing for ovens is as follows.

Oven only $810

Oven with installation service 830

Oven with maintenance services 1,000

Oven with installation and maintenance services 990

In each instance in which maintenance services are provided, the maintenance service is separately priced within the arrangement at $190. Additionally, the incremental amount charged by Crane Appliance Center for installation approximates the amount charged by independent third parties. Ovens are sold subject to a general right of return. If a customer purchases an oven with installation and/or maintenance services, in the event Crane Appliance Center does not complete the service satisfactorily, the customer is only entitled to a refund of the portion of the fee that exceeds $810.

Assume that a customer purchases an oven with both installation and maintenance services for $990.

(b) Indicate the amount of revenue that should be allocated to the oven, the installation, and to the maintenance contract. (Do not round intermediate calculations. Round final answers to 2 decimal places.)

Oven $

Installation $

Maintenance $

2.

During 2020, Sheffield Company started a construction job with a contract price of $1,610,000. The job was completed in 2022. The following information is available.

		2020		2021		2022
Costs incurred to date		$434,300		$859,560		$1,073,000
Estimated costs to complete		575,700		242,440		0
Billings to date		301,000		897,000		1,610,000
Collections to date		271,000		817,000		1,428,000

Compute the amount of gross profit to be recognized each year, assuming the percentage-of-completion method is used.

Gross profit recognized in 2020		$
Gross profit recognized in 2021		$
Gross profit recognized in 2022		$

SHOW LIST OF ACCOUNTS

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Prepare all necessary journal entries for 2021. (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. For costs incurred use account Materials, Cash, Payables.)

Account Titles and Explanation	Debit	Credit
enter an account title to record cost of construction
enter an account title to record cost of construction
(To record cost of construction.)
enter an account title to record progress billings
enter an account title to record progress billings
(To record progress billings.)
enter an account title to record collections
enter an account title to record collections
(To record collections.)
enter an account title to recognize revenue
enter an account title to recognize revenue
enter an account title to recognize revenue
(To recognize revenue.)

SHOW LIST OF ACCOUNTS

LINK TO TEXT

Compute the amount of gross profit to be recognized each year, assuming the completed-contract method is used.

		2020		2021		2022
Gross profit		$		$		$