Individual Homework 32 Page 2 of 17 Scenario #1: Gangnam Style (6 points) Gangnam Style distributes high-quality equipment and supplies to dance clubs and entertainment venues worldwide. . . . On October 28, 2020, Gangnam Style received an order from the Psy Dance Factory for a lighting sequencer and ancillary equipment and supplies at a negotiated total selling price, delivered and installed, of $373,750. On November 6, 2020, Gangnam Style ordered the sequencer and the related-equipment and supplies from the manufacturer at a total cost of $151,500 due in 30 days. On November 22, 2020, Gangnam Style received delivery of the equipment and supplies from the manufacturer with an invoice in the amount of $151,500 due in 30 days. On November 27, 2020, Gangnam Style incurred $28,975 in costs to modify the sequencer to the specifications of Psy Dance Factory. On December 2, 2020, Gangnam Style delivered and installed the sequencer and the related equipment at the Psy Dance Factory and submitted an invoice to the club for the negotiated selling price of $373.750. On January 6, 2021, Gangnam Style received a check from the Psy Dance Factory in the amount of $373,750 to settle the balance due on the order. On January 10, 2021, Gangnam Style issued a check to the manufacturer in the amount of $151,500 as payment in full. Date: a) Identify the exact date on which Gangnam Style recorded revenue from the sale to the Psy Dance Factory according to GAAP and indicate the amount of the revenue recorded (1 point each - 2 points) Amount: Date: Identify the exact date on which Gangnam Style recorded an expense from the sale to the Psy Dance Factory according to GAAP and indicate the amount of the expense recorded. (1 point each = 2 points) b) Amount: SUPPORTING COMPUTATION REQUIRED: Amount: c) Identify the amount of the profit recognized by Gangnam Style from the sale to the Psy Dance Factory according to GAAP. (2 points) SUPPORTING COMPUTATION REQUIRED: Scenario #2: Papelbon Dance Academy (6 points) On September 30, 2020, Papelbon Dance Academy hired Uehara Marketing Corp. to provide advertising and other marketing services for a monthly fee of $7,520. Papelbon Dance Academy gave a check in the amount of $90,240 to Uehara Marketing Corp. on September 30, 2020 for one year of services beginning on November 1, 2020 During 2020 Papelbon Dance Academy used the monthly services provided by Uehara Marketing Corp. from November 1 through December 31. (2 points each line = 6 points) Amount How much advertising expense, if any, was Papelbon Dance Academy a) required to recognize in its 2020 GAAP income statement from its arrangement with Uehara Marketing Corp.? SUPPORTING COMPUTATION REQUIRED: b) What amount, if any, was reported as prepaid advertising to Uehara Marketing Corp. by Papelbon Dance Academy in its GAAP balance sheet at December 31, 2020? What amount, if any, was reported as advertising payable to Uehara c) Marketing Corp. by Papelbon Dance Academy in its GAAP balance sheet at December 31, 2020? SUPPORTING COMPUTATION OR BRIEF EXPLANATION REQUIRED: Individual Homework #2 Page 5 of 17 Individual Homework 2 Page 4 of 17 Scenario #3: Iron Chef to Go (8 points) On December 10, 2020, Stephanie March, the co-owner of Iron Chef to Go, agreed to cater an employee appreciation party for Guarnaschelli Enterprises for a flat fee of $95,000, with 20% due in advance and the remainder due on the date of the party. Accordingly, Iron Chef to Go received a check for $19,000 from Guarnaschell Enterprises on December 10. On December 30, 2020, Iron Chef to Go purchased supplies for the party for $13,480 and paid cash to its supplier. On January 30, 2021, Iron Chef to Go purchased food for the party for $19,610 and paid cash to its supplier The party was held on January 31, 2021. Iron Chef to Go used all of the food and supplies purchased in December and January and paid $9,650 to its staff for their services used at the party. On March 1, 2021, Iron Chef to Go received a check from Guarnaschelli Enterprises for $76,000 in full settlement of the balance due for the party. a) Identify the items and their amounts reported by Iron Chef to Go in its 2020 GAAP financial statements relative to its contract with Guarnaschelli Enterprises: (1 point per box = 3 points) 2020 Income 2020 Statement of Balance Sheet Statement Cash Flows 12/31/2020 Date: d) Identify the exact date on which Iron Chef to Go recorded revenue from the Guarnaschelli Enterprises party according to GAAP and indicate the total amount of the revenue recorded. (1 point each - 2 points) Amount: Date: Identify the exact date which Iron Chef to Go recorde expense from the Guarnaschelli Enterprises party according to GAAP and indicate the total amount of the expense Amount: recorded (1 point each 2 points) e) SUPPORTING COMPUTATION REQUIRED: Amount How much profit did Iron Chef to Go report in its 2021 GAAP income statement from its catering agreement with Guarnaschelli Enterprises? (1 point) SUPPORTING COMPUTATION REQUIRED: Scenario #4: Laboratori Research On June 1, 2020, Laboratori Research Associates borrowed borrowed $500,000 cash from NinaBank and Trust and signed a nine-month promissory note bearing 7.8% interest. Interest of $3,250 was due monthly on the first of the following month. During 2020 Laboratori Research Associates used the money provided by NinaBank and Trust from June 1 through December 31. By December 31, 2020, Laboratori Research Associates made total cash payments for interest of $19,500 to NinaBank and Trust. (2 points each line = 6 points) Amount How much interest expense, if any, was Laboratori Research a) Associates required to recognize in its 2020 GAAP income statement from its loan with NinaBank and Trust? SUPPORTING COMPUTATION REQUIRED: b) What amount, if any, was reported as prepaid interest to NinaBank and Trust by Laboratori Research Associates in its GAAP balance sheet at December 31, 2020? What amount, if any, was reported as interest payable to NinaBank and Trust by Laboratori Research Associates in its GAAP balance sheet at December 31, 2020? SUPPORTING COMPUTATION OR BRIEF EXPLANATION REQUIRED: Scenario #5: Stefon Promotions (6 points) On April 25, 2020, Stefon Events signed a one-year contract with New York's hottest club, Club GAAP. Located on the median strip of the West Side Highway, this collaboration between DJ Baby Bok Choy and the accounting firm, PricewaterhouseCoopers, has everything: income statements; explanatory footnotes; Connect Quizzes; an unbalanced balance sheet; a woman with an overdrawn checking account; Arthur Andersen. Under the contract, Stefon Events agreed to provide monthly promotional services for Club GAAP at a monthly fee of $16,000. During 2020, Stefon Events received three checks from Club GAAP: Date Received Amount Period Covered April 25 $48,000 5/1 through 7/31/2020 July 25 $48,000 8/1 through 10/31/2020 October 13 $48,000 11/1/2020 through 1/31/2021 During 2020 Stefon Events provided the required promotional services to Club GAAP from from May 1 through December 31. Identify the items and their amounts reported by Stefon Events in its 2020 GAAP financial statements relative to its contract with Club GAAP: (2 points per box = 6 points) 2020 Income 2020 Statement of Balance Sheet Statement Cash Flows @ 12/31/2020 SUPPORTING COMPUTATION REQUIRED: iggins eceive 021. Scenario #6: Bow Tie Pathetic Industries (8 points) On March 1, 2020, Bow Tie Pathetic Industries signed a contract with No Backbone Mfg. Corp. to: iggins evelop y Deo an. dentif taten Deliver and install a computer network by March 31, 2020 Provide monthly technical services on the network for one year beginning on April 1, 2020. The total contract price was $1,500,000 due in full at the time of the installation on the network. Bow Tie Pathetic Industries estimated that of the $1,500,000 total contract price, $1,380,000 related to the computer network with the remaining $120,000 relating to the maintenance and repairs services. Bow Tie Pathetic Industries delivered and installed the computer network on March 31, 2020. Bow Tie Pathetic Industries received a check for $1,500,000 from No Backbone Mfg. Corp. on March 31, 2020 as required under the contract. Bow Tie Pathetic Industries performed the monthly technical services on the network beginning on April 1, 2020 through March 31, 2021 as required by the contract. (2 points per box = 8 points) UPPO 2020 2021 a) How much sales revenue was Bow Tie Pathetic Industries allowed to recognize from the contract with No Backbone Mfg. Corp. in its 2020 and 2021 GAAP comprehensive income statements? (2 points) b) How much technical services revenue was Bow Tie Pathetic Industries allowed to recognize from the contract with No Backbone Mfg. Corp. in its 2020 and 2021 GAAP comprehensive income statements? (4 points) SUPPORTING COMPUTATION REQUIRED: What amount did Bow Tie Pathetic Industries report as deferred revenue from No Backbone Mfg. Corp.in its GAAP balance sheet at December 31, 2020? (2 points) SUPPORTING COMPUTATION OR BRIEF EXPLANATION REQUIRED: Scenario #7: Higgins Disaster Planning (6 points) On November 15, 2020, Higgins Disaster Planning signed a contract to develop a disaster recovery plan for with Amalgamated De Luca Inc. and its computing facilities for a fee of $2,000,000. Under the contract, Higgins Disaster Planning received a check for $500,000 on November 15 as a retainer. The Company will receive the remaining $1,500,000 payment upon completing the final plan by no later than January 31, 2021. atio: ducts ancia sets irec Higgins Disaster Planning estimated that it will need a total of 8,400 worker-hours to complete the development of the plan. By December 31, 2020, Higgins Disaster Planning used 5,040 worker-hours on the project to develop the plan. Identify the items and their amounts reported by Higgins Disaster Planning in its 2020 GAAP financial statements relative to its contract with Amalgamated De Luca Inc.: (2 points per box = 6 points) Ner for 2020 Income Statement 2020 Statement of Cash Flows Balance Sheet @ 12/31/2020 SUPPORTING COMPUTATIONS REQUIRED