Accounting

Cool-IT Ltd. manufactures and sells air conditioning equipment to retailers across North America. In 2020, Cool-IT signed a two-year contract with BigMart Ltd. to supply it with 63,000 units at a price of $78 per unit. Cool-ITs cost to manufacture these units is $50. The following schedule summarizes the production, delivery, and payments in relation to the contract. Production costs are recorded to inventory:

LIST OF ACCOUNTS THAT CAN BE USED IN THE EMPTY BOXES:

• Accounts Receivable
• Administration Expenses
• Advertising Expense
• Architectural Activities
• Cash
• Cost of Goods Sold
• Depreciation Expense
• Distribution Expenses
• Dividend Revenue
• Engineering Expenses
• Financing Expenses
• Income Tax Expense
• Insurance Expense
• Interest Expense
• Interest Revenue
• Inventory
• No Entry
• Other Expenses
• Refund Liability
• Rent Expense
• Rent Revenue
• Research and Development Expenses
• Sales and Marketing Expenses
• Sales Revenue
• Selling Expenses
• Service Revenue
• Subscription Revenue
• Supplies Expense
• Unearned Revenue
• Utilities Expense
• Wages Expense
• Warranty Expense
• Warranty Liability

Question 4 --/20 View Policies Current Attempt in Progress Cool-IT Ltd. manufactures and sells air conditioning equipment to retailers across North America. In 2020, Cool-IT signed a two-year contract with BigMart Ltd. to supply it with 63,000 units at a price of $78 per unit. Cool-IT's cost to manufacture these units is $50. The following schedule summarizes the production, delivery, and payments in relation to the contract. Production costs are recorded to inventory: Air conditioning units delivered Production costs incurred Cash payments received 2020 2021 Total 40.800 22.200 63.000 $2,040,000 $1,110,000 $3,150,000 $2,739,400 $1,883.600 $4,623,000 Determine how much revenue Cool-It would be able to recognize in 2020 and 2021. Revenue recognized in 2020 $ Revenue recognized in 2021 $ e Textbook and Media List of Accounts Prepare the required summary journal entries for the contract based on your analysis in part "a" (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 O for the amounts.) Date Account Titles and Explanation Debit Credit 2020 (To record sales revenue) (To record cost of goods sold) (To record collections on account) 2021 (To record sales revenue) (To record cost of goods sold) (To record collections on account) e Textbook and Media List of Accounts How would your answer to part"a" change if Cool-IT allowed BigMart to return any air conditioners that were returned by its customers as defective? Based on past experience, Cool-It's management estimated a return rate of 2% and that the air conditioners being returned would need to be scrapped. (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 Ofor the amounts.) Date Account Titles and Explanation Debit Credit 2020 (To record sales revenue) (To record cost of goods sold) (To record collections on account) 2021 (To record sales revenue) (To record cost of goods sold) (To record collections on account)