Please check the answers Part1 1-5, and I need answers for table and part 2

Master of Science Programs Accounting for Managers Assignment 03: Income Statement and Revenue Recognition Due: Upload by the Beginning of Session 4 Part I: Income Statement Data: The financial statements from Computer Programs and Systems' (NASDAQ:CPSI) 2016 annual report are attached. You can refer to those for names of line items for the journal entries. Construct journal entries for each of the following hypothetical transactions during the next quarter. Also, indicate on the chart on page 3 which of the following balance sheet and income statement categories are affected by the transactions: assets (A), liabilities (L), equity (E), gross profit (GP), operating income (OI), and net income (NI). The numbers are rounded to $1,000s. Ignore income taxes - for example, if an item impacts sales, do not attempt to determine the effect of the item on income tax expense. Example: Received cash for interest income of $233. Solution: Dr. Cash (A) 233 Cr. Interest income (NI, SE) 233 Transactions and journal entries: 1) Sold systems costing $7,807 for $9,617 in financing receivables due in three months. Dr. Financing receivables (A) Cr. Sales revenues (NU, SE) Dr. Cost of sale (SE) Cr. Inventories $9,617 $9,617 $7,807 $7,807 1 Master of Science Programs Accounting for Managers 2) Recognized $13,833 in support and maintenance revenue that had been received in advance. Dr. Deferred revenue (L) $13,833 Cr. Sales revenue (E) $13,833 3) Sold business management services for $6,686 in financing receivables due in six months and paid $3,882 in cash to the consultants that provided the services. Dr. Financing receivable (A) $6,686 Cr. Sales revenue (NI, SE) Dr. Cost of sales (NI, SE) $6,686 $3,882 Cr. Cash (A) $3,882 4) Accrued general and administrative expenses amounting to $5,142. Dr. General and administrative expenses (NI, SE) $5,142 Cr. Cash (A) $5142 5) Recognized $208 of prepaid expenses as sales and marketing expense in this period. Dr. Sales and marketing expense(NI, SE) $208 Cr. Prepaid expenses (A) 2 $208 Master of Science Programs Accounting for Managers Net effects on balance sheet and income statement: Balance sheet Transaction Income statement A L E GP OI NI Example: Received cash for interest income of $233. +233 0 +233 0 0 +233 Sold systems costing $7,807 for $9,617 in financing receivables due in three months. 1810 1810 Recognized $13,833 in support and maintenance revenue that had been received in advance. Sold business management services for $6,686 in financing receivables due in six months and paid $3,882 in cash to the consultants that provided the services. Accrued general and administrative expenses amounting to $5,142. Recognized $208 of prepaid expenses as sales and marketing expense in this period. 3 1810 Master of Science Programs Accounting for Managers 4 Master of Science Programs Accounting for Managers 5 Master of Science Programs Accounting for Managers PART II: Revenue Recognition and Accrual Accounting Data: Excerpts from Tesla's 10-K (NASDAQ:TSLA) for the year ended December 31, 2016 are attached. 1) Explain the accounting rationale behind deferring revenues. In which section of Tesla's balance sheet do deferred revenues show up? Why? 2) Consistent with US GAAP's revenue recognition criteria Tesla typically recognizes automobile sales revenue (but not the associated services such as internet connectivity etc.) at the time the customer receives the automobile. Suppose effective beginning of fiscal 2016 (i.e., no effect on prior years) Tesla changed its policy for automobile sales and started recognizing revenues as soon as the company receives the order regardless of when the delivery is made. Would revenues for fiscal 2016 be higher, lower, or the same? 3) Using 2016 balance sheet and income statement data, can you estimate how much cash Tesla collected from its customers? (Hint: You should start with the total revenues and make adjustments. Revenues are composed of cash and credit sales (i.e., changes in in A/R) but does not include any cash collected in advance (i.e., changes in deferred revenues)). 6 Master of Science Programs 4) Accounting for Managers When does Tesla recognize the transportation costs for car deliveries as an expense? Which accounting principle requires this kind of treatment? 5) When does Tesla recognize marketing expenses? How is this treatment different from that of transportation costs? 7 Master of Science Programs Accounting for Managers 8 Master of Science Programs Accounting for Managers 9 Master of Science Programs Accounting for Managers 10