ANSWER PART C ( WITH FULL STEPS PLEASE)

Application Problem 4-5A a1, b-c (Part Level Submission) 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 63,300 units at a price of $78 per unit. Cool-IT's cost to manufacture these units is $51. 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 41,500 $2,116,500 $2,780,000 2021 21,800 $1,111,800 $1,868,400 Total 63,300 $3,228,300 $4,648,400 (a1) Your answer is correct. Determine how much revenue Cool-IT would be able to recognize in 2020 and 2021. 5 Revenue recognized in 2020 3237000 Revenue recognized in 2021 del 1700400 (b) Your answer is correct. 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 Accounts Receivable 3237000 J1 3237000 Sales Revenue (To record sales revenue) Tcost of Goods Sold T 1 211 T Inventory (To record cost of goods sold) Tcash 2780000 T 2780000 | Accounts Receivable (To record collections on account) 2021 Accounts Receivable 1700 Sales Revenue (To record sales revenue) Tcost of Goods Sold Inventory (To record cost of goods sold) Cash Accounts Receivable 1868400 (To record collections on account) (c) How would your answer to part "a" change if Cool-IT allowed BigMart to return any air conditioners that were retumed 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 tities 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 recard cost of goods sold) (To record collections on account)