new subdivision during 2020 and 2021 under contract with Cactus Development Co. Relevant data are summarized Arizona Desert Homes (ADH) constructed below: Contract amount Cost: 2020 2021 Gross profit: 2020 2021 2020 2021 $2,955,000 1,190,000 590,000 785,000 390,000 1,477,500 1,477,500 Contract billings: ADH recognizes revenue upon completion of the contract. What is the journal entry in 2021 to record revenue? 1,477,500 Accounts receivable Revenue from long-term contracts 1,477,500 Construction in progress Cost of construction Revenue from long-term contracts 390,000 590,000 980,000 Cost of construction Gross profit Revenue from long-term contracts 1,975,000 980,000 2,955,000 Construction in progress Cost of construction Revenue from long-term contracts 1,175,000 1,780,000 2,955,000 The Rink offers annual $200 memberships that entitle members to unlimited use of ice-skating facilities and locker rooms. Each new membership also entitles the member to receive ten 20% off a $5 meal coupons that are redeemable at the Rink's snack bar. The Rink estimates that approximately 80% of the coupons will be redeemed, and that, if the coupons weren't redeemed, $5 meals still would be discounted by 5% because of ongoing promotions. Required: Prepare the journal entry to recognize the sale of a new membership. Clearly identify revenue or deferred revenue associated with each performance obligation. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field. Round your answers to 2 decimal places.) No Transaction General Journal Debit Credit 1 1 Cash 200.00 Deferred revenuemembership fees 196.71 X Deferred revenuemeal coupon 3.29 X Antonio's Car Services provides maintenance services for motorized vehicles. In March 2021, Rick placed an order for a new set of tires for $350. When a customer purchases goods or services in excess of $300, Antonio's gives the customer a 25% discount coupon for future purchases made in the next three months. Antonio's estimates that approximately 80% of customers utilize the coupon and that on average those customers will purchase goods or services that typically sell for $75. Required: (a) How many performance obligations are in Rick's contract? (b) Prepare a journal entry to record revenue for this transaction, assuming that Antonio's uses the residual method to estimate the stand-alone selling price of new tires sold without the discount coupon. Complete this question by entering your answers in the tabs below. Required A Required B Prepare a journal entry to record revenue for this transaction, assuming that Antonio's uses the residual method to estimate the stand-alone selling price of new tires sold without the discount coupon. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.) No Transaction General Journal Debit Credit 1 1 350 Cash Deferred revenue 15 Sales revenue 30 X
