Problem 3 DGA Associates, Inc. sells computer workstations designed for architects. In 2018, it sold 120 workstations for $360,000. For each workstation sold, DGA distributed a 40% discount coupon for any additional future purchases made in the next 12 months. Based on historical experience, DGA expects that approximately 30% of the coupons will be utilized, and the goods purchased with the coupons would normally sell for $350. Required: (1) How many performance obligations are in a contract to purchase a computer workstation? Explain the reasons for your answer. (b) Prepare a journal entry to record revenue for the sale of 120 computer workstations, assuming that DGA uses the residual method to estimate the stand-alone selling price of the workstations sold without the discount coupon. Show all work to receive full credit. Problem 4 The Fitzgerald Company maintains a checking account at the Bank of the North. The bank provides a bank statement along with canceled checks on the last day of each month. The October 31, 2018, bank! statement included the following information: Balance, October 1, 2018 $ 32,690 Deposits Checks processed Service charges NSF checks Monthly loan payment deducted directly by bank from account (includes $400 in interest) 86,000 (75.200) (350) (1.600) (3.400) Balance, October 31, 2018 $38.140 The company's general ledger cash (checking) account had a balance of $42,544 at the end of October Deposits outstanding totaled $4.224, and all checks written by the company were processed by the bank except for those totaling $5.620. In addition, a check for $500 for the purchase of office furniture was incorrectly recorded by the company as a $50 disbursement. The bank correctly processed the check during October Required: Prepare a bank reconciliation for the month of October. Prepare the necessary journal entries at the end of October to adjust the general ledger cash account. Extra Credit List (in order) the five steps of the FASB Accounting Standards Update (ASU) No. 2014-09, 11 | Page Problem 3 DGA Associates, Inc. sells computer workstations designed for architects. In 2018, it sold 120 workstations for $360,000. For each workstation sold, DGA distributed a 40% discount coupon for any additional future purchases made in the next 12 months. Based on historical experience, DGA expects that approximately 30% of the coupons will be utilized, and the goods purchased with the coupons would normally sell for $350. Required: (1) How many performance obligations are in a contract to purchase a computer workstation? Explain the reasons for your answer. (b) Prepare a journal entry to record revenue for the sale of 120 computer workstations, assuming that DGA uses the residual method to estimate the stand-alone selling price of the workstations sold without the discount coupon. Show all work to receive full credit. Problem 4 The Fitzgerald Company maintains a checking account at the Bank of the North. The bank provides a bank statement along with canceled checks on the last day of each month. The October 31, 2018, bank! statement included the following information: Balance, October 1, 2018 $ 32,690 Deposits Checks processed Service charges NSF checks Monthly loan payment deducted directly by bank from account (includes $400 in interest) 86,000 (75.200) (350) (1.600) (3.400) Balance, October 31, 2018 $38.140 The company's general ledger cash (checking) account had a balance of $42,544 at the end of October Deposits outstanding totaled $4.224, and all checks written by the company were processed by the bank except for those totaling $5.620. In addition, a check for $500 for the purchase of office furniture was incorrectly recorded by the company as a $50 disbursement. The bank correctly processed the check during October Required: Prepare a bank reconciliation for the month of October. Prepare the necessary journal entries at the end of October to adjust the general ledger cash account. Extra Credit List (in order) the five steps of the FASB Accounting Standards Update (ASU) No. 2014-09, 11 | Page