E3-3 (Algo) Identifying Revenues LO3-2, 3-3 Revenues are normally recognized when the company transfers promised goods or services in the amount the company expects to be entitled to receive. The amount recorded is the cash-equivalent sales price. Assume that the following transactions occurred in September: a. A popular ski magazine company receives a total of $11,945 today from subscribers. The subscriptions begin in the next fiscal year. Answer from the magazine company's standpoint. b. On September 1 of the current year, a bank lends $1,300 to a company, the note principal and $156 ($1,300 * 12 percent) annual interest are due in one year. Answer from the bank's standpoint. c. Fucillo Automotive Group (offering a wide variety of car and truck brands) sells a Ford F-150 truck with a list, or "sticker," price of $20,850 for $18,550 cash. d. Macy's department store orders 1,170 men's shirts for $30 each for future delivery from PVH Corp., manufacturer of IZOD, ARROW, Van Heusen, Calvin Klein, and Tommy Hilfiger and other brand-name apparel. The terms require payment in full within 30 days of delivery. Answer from PVH Corp.'s standpoint. e. PVH Corp. completes production of the shirts described in and delivers the order. Answer from PVH's standpoint. f. PVH Corp. receives payment from Macy's for the events described in (d) and (e). Answer from PVH's standpoint. g. A customer purchases a ticket from American Airlines for $680 cash to travel the following January. Answer from American Airlines's standpoint. h. Ford Motor Company issues $20.7 million in new common stock. i. Michigan State University receives $19,150,000 cash for 85,000 seven-game season football tickets to be played in the upcoming season. j. Michigan State plays the first football game referred to in (). k. Precision Builders signs a contract with a customer for the construction of a new $1,690,000 warehouse. At the signing, Precision receives a check for $194,000 as a deposit on the future construction. Answer from Precision's standpoint. 1. Best Buy receives inventory of 17 laptop computers from Dell; Best Buy promises to pay $9,300 within three months. Answer from Dell's standpoint. m. Amazon.com delivers a $170 lamp to a customer who charges the purchase on his Amazon.com Store Card. Answer from Amazon's standpoint. Required: For each of the transactions, if revenue is to be recognized in September, indicate the revenue account title and amount. (If revenue is not recognized choose "None".) Revenue Account Affected Amount of Revenue Earned in September