Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

On February 1, 2020, Concord Ltd. began selling electric scooters that it purchased exclusively from Ionone Motors Inc. Ionone Motors offers volume rebates based on

On February 1, 2020, Concord Ltd. began selling electric scooters that it purchased exclusively from Ionone Motors Inc. Ionone Motors offers volume rebates based on the volume of annual sales to its customers and calculates and pays the rebates at its fiscal year end, December 31. Concord has a September fiscal year end and uses a perpetual inventory system. The rebate offer that Concord received is for a $75 rebate on each scooter that is purchased in excess of 150 units in the calendar year, ending December 31. An additional rebate of $30 is given for all units purchased in excess of 175 units in the same year. By September 30, 2020, Concord had purchased 170 units from Ionone Motors and had sold all but 35. Although it only made its first purchase on February 1, 2020, Concord expects to purchase a total of 205 electric scooters from Ionone Motors by December 31, 2020. Before arriving at the estimate of 205 electric scooters, Concords management looked carefully at trends in purchases by its competitors and the strong market for sales of electric scooters in the coming months; sales are especially strong among environmentally conscious customers in suburban areas. Management is very confident the 205 electric scooters will be purchased by December 31, 2020. Assuming that Concord follows the reporting requirements under ASPE, answer the following questions.

Calculate the amount of any accrued rebate to be recorded by Concord at September 30, 2020, assuming that the rebate is not discretionary and that management has a high degree of confidence in its estimate of the amount of purchases that will occur by December 31, 2020. (Round per unit rate to 2 decimal places, e.g. 1.25 and final answer to 0 decimal places, e.g. 5,275.)

Accrued rebate $

eTextbook and Media

Assistance Used

List of Accounts

Record the accruals that are needed at Concords fiscal year end of September 30, 2020. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts. Round answers to 0 decimal places, e.g. 5,125.)

Date

Account Titles and Explanation

Debit

Credit

Sep. 30, 2020

eTextbook and Media

List of Accounts

How would your response change if Concord followed the reporting requirements of IFRS?

The response changesremains unchanged under the reporting requirements of IFRS.

Step by Step Solution

There are 3 Steps involved in it

Step: 1

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

Step: 3

blur-text-image

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

Auditing A Practical Approach

Authors: Robyn Moroney, Fiona Campbell, Jane Hamilton, Valerie Warren

1st Extended Canadian Edition

1118878418, 9781118878415

More Books

Students also viewed these Accounting questions