Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

On January 1, Revis Consulting entered into a contract to complete a cost reduction program for Green Financial over a six-month period. Revis will receive

image text in transcribed
image text in transcribed
image text in transcribed
On January 1, Revis Consulting entered into a contract to complete a cost reduction program for Green Financial over a six-month period. Revis will receive $60,800 from Green at the end of each month. If total cost savings reach a specific target, Revis will receive an additional $30.400 from Green at the end of the contract, but if total cost savings fall short, Revis will refund $30.400 to Green Revis estimates an 80% chance that cost savings will reach the target and calculates the contract price based on the expected value of future payments to be received Required: Prepare the following journal entries for Revis 1. to 3. Prepare the journal entry on January 31 to record the collection of cash and recognition of the first month's revenue. Also record the entry on June 30 for receipt of the bonus assuming total cost savings exceed target. And record the entry on June 30 for payment of the penalty assuming total cost savings fall short of target. (if no entry is required for a transaction/event, select "No journal entry required" in the first account field.) View transaction list Journal entry worksheet Record the receipt of the bonus assuming total cost savings exceed target. Note: Enter debits before credits General Joumal Debit Credit Date June 30 Record entry Clear entry View general journal On January 1, Revis Consulting entered into a contract to complete a cost reduction program for Green Fi period. Revis will receive $60,800 from Green at the end of each month. If total cost savings reach a spe an additional $30.400 from Green at the end of the contract, but if total cost savings fall short, Revis will Revis estimates an 80% chance that cost savings will reach the target and calculates the contract price be future payments to be received Required: Prepare the following journal entries for Revis 1. to 3. Prepare the journal entry on January 31 to record the collection of cash and recognition of the first record the entry on June 30 for receipt of the bonus assuming total cost savings exceed target. And reco payment of the penalty assuming total cost savings fall short of target. (If no entry is required for a transe journal entry required" in the first account field.) View transaction list Journal entry worksheet

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 risk based approach to conducting a quality audit

Authors: Karla Johnstone, Audrey Gramling, Larry Rittenberg

9th edition

9781133939160, 1133939155, 1133939163, 978-1133939153

More Books

Students also viewed these Accounting questions

Question

Know why employees turn to unions

Answered: 1 week ago

Question

Understand the process of effective succession planning

Answered: 1 week ago

Question

Understand the history of unionization

Answered: 1 week ago