Problem 18-04

Cullumber Appliance Co. manufactures low-price, no-frills appliances that are in great demand for rental units. Pricing and cost information on Cullumbers main products are as follows.

Problem 18-04 Cullumber Appliance Co. manufactures low-price, no-frills appliances that are in great demand for rental units. Pricing and cost information on Cullumber's main products are as follows. Item Refrigerator Range Stackable washer/dryer unit Standalone Selling Price (Cost) $500 ($260 ) 570 (280) 710 (400) Customers can contract to purchase either individually at the stated prices or a three-item bundle with a price of $1,820. The bundle price includes delivery and installation. Cullumber also provides installation (not a separate performance obligation). Respond to the requirements related to the following independent revenue arrangements for Cullumber Appliance Co. On June 1, 2020, Cullumber sold 110 washer/dryer units without installation to Laplante Rentals for $78,100. Laplante is a newer customer and is unsure how this product will work in its older rental units. Cullumber offers a 60-day return privilege and estimates, based on prior experience with sales on this product, 4% of the units will be returned. Prepare the journal entries for the sale and related cost of goods sold on June 1, 2020. (Credit account tities 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 o for the amounts.) Account Titles and Explanation Debit Credit (To record sales) (To record cost of goods sold) YellowCard Property Managers operates upscale student apartment buildings. On May 1, 2020, Cullumber signs a contract with YellowCard for 310 appliance bundles to be delivered and installed in one of its new buildings. YellowCard pays 20% cash at contract signing and will pay the balance upon installation no later than August 1, 2020. Prepare journal entries for Cullumber on (1) May 1, 2020, and (2) August 1, 2020, when all appliances are installed. (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 o for the amounts.) No. Date Account Titles and Explanation Debit Credit (1) May 1, 2020 (2) Aug 1, 2020 (To record sales) (To record cost of goods sold) Refer to the arrangement in part (b). It would help YellowCard secure lease agreements with students if the installation of the appliance bundles can be completed by July 1, 2020. YellowCard offers a 10% bonus payment if Cullumber can complete installation by July 1, 2020. Cullumber estimates its chances of meeting the bonus deadline to be 90%, based on a number of prior contracts of similar scale. Repeat the requirement for part (b), given this bonus provision. Assume installation is completed by July 1, 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 o for the amounts.) Date Account Titles and Explanation Debit Credit M .1090 Refer to the arrangement in part (b). It would help YellowCard secure lease agreements with students if the installation of the appliance bundles can be completed by July 1, 2020. YellowCard offers a 10% bonus payment if Cullumber can complete installation by July 1, 2020. Cullumber estimates its chances of meeting the bonus deadline to be 90%, based on a number of prior contracts of similar scale. Repeat the requirement for part (b), given this bonus provision. Assume installation is completed by July 1, 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 o for the amounts.) Account Titles and Explanation Debit Credit Date May 1, 2020 Jul. 1, 2020 (To record sales) (To record cost of goods sold) Epic Rentals would like to take advantage of the bundle price for its 380-unit project; on February 1, 2020, Cullumber signs a contract with Epic for 380 bundles. Under the agreement, Cullumber will hold the appliance bundles in its warehouses until the new rental units are ready for installation. Epic pays 10% cash at contract signing. On April 1, 2020, Cullumber completes manufacture of the appliances in the Epic bundle order and places them in the warehouse. Cullumber and Epic have documented the warehouse arrangement and identified the units designated for Epic. The units are ready to ship, and Cullumber may not sell these units to other customers. Prepare journal entries for Cullumber on (1) February 1, 2020, and (2) April 1, 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 o for the amounts.) Date Account Titles and Explanation Debit Credit Epic Rentals would like to take advantage of the bundle price for its 380-unit project; on February 1, 2020, Cullumber signs a contract with Epic for 380 bundles. Under the agreement, Cullumber will hold the appliance bundles in its warehouses until the new rental units are ready for installation. Epic pays 10% cash at contract signing. On April 1, 2020, Cullumber completes manufacture of the appliances in the Epic bundle order and places them in the warehouse. Cullumber and Epic have documented the warehouse arrangement and identified the units designated for Epic. The units are ready to ship, and Cullumber may not sell these units to other customers. Prepare journal entries for Cullumber on (1) February 1, 2020, and (2) April 1, 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 o for the amounts.) Date Account Titles and Explanation Debit Credit Feb. 1, 2020 Apr. 1, 2020 (To record sales) (To record cost of goods sold) Click if you would like to show Work for this question: Open Show Work