1:02 ..l 4G Revenue Recognition.xlsx Opening Main 1 Main 2 Steps Method Determine the transaction price Recognice revenue when each performance obligation is satisfied Indentify the contract Allocate the transaction price to performance obligations Identify the performance obligations Revenue Recognition.xlsx for $100 million and includes and 10 years of support services once the satellite is delivered in one 1:02 ...10 4G Opening Main 1 Main 2 AP4-4B (Revenue recognition) ADM Ltd. is a public company that manufactures and sells satellite systems and provides support services. ADM's customers can purchase satellites or support services separately, but the company also offers satellite systems that include training and 1, 2020, ADM that was purchased by First Web would normally sell for 895 million and 10 years of support services would be valued at $15 million if purchased separately. ADM's management expects the satellite to be delivered in orbit by October 1, 2021. The support is expected to be provided evenly for 10 years after delivery of the satellite. The contract requires First Web to make a $15- million payment to ADM within 30 days of signing the contract and then $35 million on October 1, 2021, with the balance to be paid annually over 10 years once the satellite is delivered in orbit on October 1, 2021. First Web has secured financing to pay for the satellite system and so ADM's management has to concerns related to collectabllity. Required a. Assuming that ADM provides the goods and services as and when expected under the contract and First Web makes its payments as required, determine when and how much revenue ADM would be able to recognize in each of the first three fiscal years ending December 31 (2020,2021, 2022) of the contract. Use the five-step model for revenue recognition in preparing your response. Round percentages to the nearest two decimal places h. Based on your analysis in part", "prepare the required journal entries for 2020 2021 and 2032. Assume ADM records adjusting journal entries at December 31 each year, 1:02 ..l 4G 64 X Revenue Recognition.xlsx Opening Main Main 2 a. Rod S290,000 from the issuance of shares b. Bunched a fruibelunkat per year. e. Purchased equipment for $175.000 d. Purchased Imantecasting 85.000, paying go.coo, with the laten c. Becaned alreedschall exe anal ballon artean lordomn. The imary related in the lead act of 549 .. 1. P20,000 to supplicated to the love hery in ch Paid 8.00 in Wages to employees, h. Repaid bra principal of 84.000 plus interest 81.200 related to the banks i. Marial duritaintamil,utha ni| 3. Declared vidends of 88.000. Required: Identify the errors in the following solution ASSETS ERROR Duis CASH INY EQUIP AT LIABILMES SH FRUITY DIVIDENDS TWY. LOAN PAYABLE CONIVON SHARES 25 RE OD bi 106.00 OS DE -TRON 124 di -50.000 7100 25.000 41 RO 2000 si -43.000 - 40.000 n -11 30 as 9 -3.700 -3. hi -1,200 -22.00 -22 R900 1000 W ( r 1:02 ..l 4G Revenue Recognition.xlsx Opening Main 1 Main 2 Steps Method Determine the transaction price Recognice revenue when each performance obligation is satisfied Indentify the contract Allocate the transaction price to performance obligations Identify the performance obligations Revenue Recognition.xlsx for $100 million and includes and 10 years of support services once the satellite is delivered in one 1:02 ...10 4G Opening Main 1 Main 2 AP4-4B (Revenue recognition) ADM Ltd. is a public company that manufactures and sells satellite systems and provides support services. ADM's customers can purchase satellites or support services separately, but the company also offers satellite systems that include training and 1, 2020, ADM that was purchased by First Web would normally sell for 895 million and 10 years of support services would be valued at $15 million if purchased separately. ADM's management expects the satellite to be delivered in orbit by October 1, 2021. The support is expected to be provided evenly for 10 years after delivery of the satellite. The contract requires First Web to make a $15- million payment to ADM within 30 days of signing the contract and then $35 million on October 1, 2021, with the balance to be paid annually over 10 years once the satellite is delivered in orbit on October 1, 2021. First Web has secured financing to pay for the satellite system and so ADM's management has to concerns related to collectabllity. Required a. Assuming that ADM provides the goods and services as and when expected under the contract and First Web makes its payments as required, determine when and how much revenue ADM would be able to recognize in each of the first three fiscal years ending December 31 (2020,2021, 2022) of the contract. Use the five-step model for revenue recognition in preparing your response. Round percentages to the nearest two decimal places h. Based on your analysis in part", "prepare the required journal entries for 2020 2021 and 2032. Assume ADM records adjusting journal entries at December 31 each year, 1:02 ..l 4G 64 X Revenue Recognition.xlsx Opening Main Main 2 a. Rod S290,000 from the issuance of shares b. Bunched a fruibelunkat per year. e. Purchased equipment for $175.000 d. Purchased Imantecasting 85.000, paying go.coo, with the laten c. Becaned alreedschall exe anal ballon artean lordomn. The imary related in the lead act of 549 .. 1. P20,000 to supplicated to the love hery in ch Paid 8.00 in Wages to employees, h. Repaid bra principal of 84.000 plus interest 81.200 related to the banks i. Marial duritaintamil,utha ni| 3. Declared vidends of 88.000. Required: Identify the errors in the following solution ASSETS ERROR Duis CASH INY EQUIP AT LIABILMES SH FRUITY DIVIDENDS TWY. LOAN PAYABLE CONIVON SHARES 25 RE OD bi 106.00 OS DE -TRON 124 di -50.000 7100 25.000 41 RO 2000 si -43.000 - 40.000 n -11 30 as 9 -3.700 -3. hi -1,200 -22.00 -22 R900 1000 W ( r