Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

(i) Service Contract Revenue: In mid-year, TouchBase signed a 2-year contract to provide repair services for the computers at a local school district, beginning July

(i) Service Contract Revenue: In mid-year, TouchBase signed a 2-year contract to provide repair services for the computers at a local school district, beginning July 1, 2021. The school district paid an initial lump sum of $80,000, and agreed to pay an additional $4,200 each month. Only the $105,200 cash received ($80k + 6 x $4.2k) during 2021 was all recorded as “Revenue - Service Contract”. The contract also provides for a $10,000 bonus at the end of each 12-month contract period (each June 30) if TouchBase meets a series of performance targets during that time. As the end of 2021 approaches, TouchBase estimates the probability of earning the bonus on June 30, 2022 and 2023 to be 70%. 

Cost of Services: TouchBase had employees track the cost of providing repair services, and recorded them in a “COS - Repair Services” account. During 2020 and 2021, these amounts were $206,010 and $208,020, respectively. For 2021, TouchBase employees separately recorded the cost of providing extended warranty services in “COS – Service Contract”; the amount was $63,120. Note: no issues identified.


Journal Entry: j) Income TaxIncome TaxNote: insert rows within the print area as needed
12/31/21Example debit99,999
Example credit99,999
Briefly describe the issue and explain how your journal entry/(ies) fix the problem:
Show detailed, clearly-labeled calculations for any values:








Step by Step Solution

3.38 Rating (160 Votes )

There are 3 Steps involved in it

Step: 1

3 QUIZ Iune 30th 2023 Liy 1 2021 80 000 Initial lu... blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image_2

Step: 3

blur-text-image_3

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Cost Accounting A Managerial Emphasis

Authors: Charles T. Horngren, Srikant M.Dater, George Foster, Madhav

13th Edition

8120335643, 136126634, 978-0136126638

More Books

Students also viewed these Accounting questions

Question

In Exercises simplify the ratio of factorials. (n + 1)! n!

Answered: 1 week ago

Question

11.5 Describe the biological bases of schizophrenia.

Answered: 1 week ago

Question

11.8 Evaluate the methods used to treat schizophrenia.

Answered: 1 week ago