On December 10, 2019, Kool Air Solutions agreed to manufacture and supply 795 refrigerators used by Vandelay Industries Vandelay deposited $160 per unit upon signing the 3 year purchase agreement, which set the selling price of each refrigerator at $950 Kool Airs inventory cost is $460 per unit No units were delivered during 2019 During 2020, 185 units will be delivered during 2021, 330 units will be delivered and during 2022, the remaining units will be delivered Assume Kool Air uses a perpetual inventory system and Vandelay pays in cash upon delivery of units for amounts not covered by the deposit Required 1 Conceptual Connection Prepare the entry by Kool Air to record receipt of the deposit during 2019 How would the deposit be reported in the financial statements at the end of 2019 2 Conceptual Connection Prepare the entry by Kool Air to record the delivery of 185 units during 2020 How would the deposit be reported in the financial statements at the end of 2020 3 Prepare the entry by Kool Air to record the delivery of 330 units during 2021 CHART OF ACCOUNTS Kool Air Solutions General Ledger ASSETS 111 Cash 112 Petty Cash 121 Accounts Receivable 123 Allowance for Doubtful Accounts 124 Notes Receivable 125 Supplies 126 Prepaid Insurance 127 Prepaid Rent 128 Inventory 129 Interest Receivable 130 Investment 131 Land 132 Buildings 133 Equipment 134 Furniture 135 Trucks 139 Accumulated Depreciation LIABILITIES 211 Accounts Payable 212 Utilities Payable 213 Insurance Payable 214 Interest Payable 215 Warranty Liability 216 Income Taxes Payable 221 Excise Taxes Payable (Federal) 222 Excise Taxes Payable (State) 223 Property Taxes Payable 224 Sales Taxes Payable (State) 231 Wages Payable 233 Commissions Payable 234 Federal Income Taxes Withholding Payable 235 State Income Taxes Withholding Payable 236 Social Security Taxes Payable 237 Medicare Taxes Payable 238 Charitable Contributions Payable 239 Union Dues Payable 241 Federal Unemployment Taxes Payable 242 State Unemployment Taxes Payable 251 Unearned Sales Revenue 252 Unearned Rent Revenue 261 Bonds Payable 262 Notes Payable EQUITY 311 Common Stock 321 Retained Earnings 331 Dividends REVENUE 411 Sales Revenue 412 Service Revenue 413 Interest Income 414 Rent Revenue

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On December 10, 2019, Kool-Air Solutions agreed to manufacture and supply 795 refrigerators used by Vandelay Industries. Vandelay deposited $160 per unit upon signing the

On December 10, 2019, Kool-Air Solutions agreed to manufacture and supply 795 refrigerators used by Vandelay Industries. Vandelay deposited $160 per unit upon signing the 3-year purchase agreement, which set the selling price of each refrigerator at $950. Kool-Airs inventory cost is $460 per unit. No units were delivered during 2019. During 2020, 185 units will be delivered; during 2021, 330 units will be delivered; and during 2022, the remaining units will be delivered. Assume Kool-Air uses a perpetual inventory system and Vandelay pays in cash upon delivery of units for amounts not covered by the deposit.

Required:

Conceptual Connection: Prepare the entry by Kool-Air to record receipt of the deposit during 2019. How would the deposit be reported in the financial statements at the end of 2019?

Conceptual Connection: Prepare the entry by Kool-Air to record the delivery of 185 units during 2020. How would the deposit be reported in the financial statements at the end of 2020?

Prepare the entry by Kool-Air to record the delivery of 330 units during 2021.

CHART OF ACCOUNTS

Kool-Air Solutions

General Ledger

	ASSETS
111	Cash
112	Petty Cash
121	Accounts Receivable
123	Allowance for Doubtful Accounts
124	Notes Receivable
125	Supplies
126	Prepaid Insurance
127	Prepaid Rent
128	Inventory
129	Interest Receivable
130	Investment
131	Land
132	Buildings
133	Equipment
134	Furniture
135	Trucks
139	Accumulated Depreciation

	LIABILITIES
211	Accounts Payable
212	Utilities Payable
213	Insurance Payable
214	Interest Payable
215	Warranty Liability
216	Income Taxes Payable
221	Excise Taxes Payable (Federal)
222	Excise Taxes Payable (State)
223	Property Taxes Payable
224	Sales Taxes Payable (State)
231	Wages Payable
233	Commissions Payable
234	Federal Income Taxes Withholding Payable
235	State Income Taxes Withholding Payable
236	Social Security Taxes Payable
237	Medicare Taxes Payable
238	Charitable Contributions Payable
239	Union Dues Payable
241	Federal Unemployment Taxes Payable
242	State Unemployment Taxes Payable
251	Unearned Sales Revenue
252	Unearned Rent Revenue
261	Bonds Payable
262	Notes Payable