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Carla Vista Inc., a registered broker, enters into a finder's fee agreement with Wildhorse Homes Ltd . on June 1 5 , 2 0 2
Carla Vista Inc., a registered broker, enters into a finder's fee agreement with Wildhorse Homes Ltd on June Carla Vista will
find leads in the form of buyers potentially interested in purchasing Wildhorse's real estate holdings. Along with finding potential
buyers, Carla Vista helps negotiate the selling price and provides advice on contract details. If and when Wildhorse closes a sale, Carla
Vista will be paid within days of the closing date, based on the following formula: of any transaction value up to and including $
million, plus of any transaction value greater than $ million and less than and including $ million, plus of any transaction value
greater than $ million and less than and including $ million, plus of any transaction value greater than $ million and less than
and including $ million, plus of any transaction value in excess of $ million. If Carla Vista uses another broker and this
information is not shared with Wildhorse, the fee is reduced by On September Wildhorse paid Carla Vista $ to
provide some needed cash flow for seeking out buyers. On October an offer was made and accepted for a parcel of real
estate at a price of $ million. The transaction closed on November and Carla Vista was paid the finder's fee net of $
on November
Determine the accounting treatment of the above events for Carla Vista Inc. and prepare any journal entries needed on: Credit account
titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select No Entry" for the account
titles and enter for the amounts. List all debit entries before credit entries.
a June
b September
c October
d November
e November
Account Titles and Explanation
Debit
Credit
No Entry
No Entry
No Entry
Accounts Receivable
Materials, Cash, Payables
Cash
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