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13. Turnadot & Sons is a small wholesaler of decorative cast iron objects. The following events, related to a special customer order, occur as described
13. Turnadot & Sons is a small wholesaler of decorative cast iron objects. The following events, related to a special customer order, occur as described below: August 5, 2005: Turnadot receives the special order for 200 outdoor planters at a selling price of $50 each, including delivery at a future convenient time and location. The customer, with whom Turnadot has had a long-term, trouble-free relationship, pays $3,000 as a deposit and agrees to pay the rest on delivery. Turnadot immediately orders $4,000 worth of planters from its supplier and pays a $1,000 deposit for them. August 27, 2005: Turnadot pays $3,000 balance due to the supplier upon delivery of the planters to its warehouse. September 5, 2005: The customer calls for delivery of the planters, and pays the balance of $7,000 when they arrive at the customer site. On August 5, 2005, which one of the following accounting entries, related to the $10,000 special order, should be recorded in Turnadot's financial accounting system? Debit accounts receivable $10,000; credit revenues $10,000 Debit cash $3,000; credit revenues $3,000 Debit cash $3,000; credit a liability 'advances from customers' $3,000 Debit cash $3,000; debit accounts receivable $7,000; credit revenues $10,000
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