Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

On March 15, 2020, Drexel Corp. provides goods to a retailer through consignment where Drexel Corp. retains ownership of the goods until the goods are

image text in transcribed

On March 15, 2020, Drexel Corp. provides goods to a retailer through consignment where Drexel Corp. retains ownership of the goods until the goods are sold to the retailer's customer. Sale to the final customer is documented when the goods are scanned at the cash register of the retailer, Drexel Corp. receives a daily report on the number of units sold by the retailer to the end customer, Any unsold product can be returned to Drexel Corp. at anytime. Drexel Corp. has the right through the contract to recall any goods shipped and to transfer the goods to another retailer as a way to increase the rate of sales to the final customer. After the sale of the products to the final customer, the retailer cannot return the items to Drexel Corp. During March of 2020, Drexel Corp. transferred 960 units to the retailer, and the retailer sold 800 units. The product cost Drexel Corp. $80 per unit and the product was sold for $115 per unit to the end customer. The retailer sent a payment to Drexel Corp, for the cash collected on the sale of product less a 10% commission on April 7, 2020. a. At what point should Drexel Corp. recognize revenue? Recognize revenue when the product is sold to the end customer D D n b. Record Drexel's entries on March 15, 2020, March 31, 2020, and April 7, 2020. Note: If a journal entry (or a line of the journal entry) isn't required for the transaction, select "N/A" as the account names and leave the Dr. and Cr, answers blank (zero). Date Account Name Dr. Cr. Mar 15, 2020 N/A , / NA Mar 31, 2020 Due from Consignee OX Sales Commission Expense + DX Sales Revenue SICS 0 0 OX To record the sale ol_product. Cost of Goods Sold 64.000 0 0 64.000 To record the cost of sale of product. April 7, 2020 Cash OX 0 Due from Consignee OX 0* rwentory 0 0

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

Income Tax Planning

Authors: Thomas P. Langdon, E. Vance Grange, Michael A. Dalton

5th Edition

1936602075, 978-1936602070

More Books

Students also viewed these Accounting questions