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On January 1, 2023, Pharoah Co. enters into a contract to sell a customer a wiring base and a shelving unit that sits on the base in exchange for $2,800. The contract requires delivery of the base first but states that payment for the base will not be made until the shelving unit is delivered. Pharoah identifies two performance obligations and allocates $1,400 of the transaction price to the wiring base and the remainder to the shelving unit. The cost of the wiring base is $950; the shelves have a cost of $430. (a) Prepare the journal entry on January 1, 2023, for Pharoah. (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 0 for the amounts. List debit entry before credit entry.) Sheridan Company manufactures equipment. Sheridan's products range from simple automated machinery to complex systems containing numerous components. Unit selling prices range from $255,000 to $1,680,000, and are quoted inclusive of installation. The installation process does not involve changes to the features of the equipment to perform to specifications. Sheridan has the following arrangement with Splish Inc. - Splish purchases equipment from Sheridan on May 2, 2023, for a price of $1,056,000 and contracts with Sheridan to install the equipment. Sheridan charges the same price for the equipment irrespective of whether it does the installation or not. Using market data, Sheridan determines that the installation service is estimated to have a fair value of $44,000. The cost of the equipment is $700,000. - Splish is obligated to pay Sheridan the $1,012,000 on delivery of the equipment and the balance on the completion of the installation. Sheridan delivers the equipment on June 1, 2023, and completes the installation of the equipment on September 30, 2023. Assume that the equipment and the installation are two distinct performance obligations that should be accounted for separately. Blossom Publishing Co. publishes college and university textbooks that are sold to bookstores on the following terms. Each title has a fixed wholesale price, terms f.o.b. shipping point, and payment is due 60 days after shipment. The retailer may return a maximum of 30% of an order at the retailer's expense. Sales are made only to retailers who have good credit ratings. Past experience indicates that the normal return rate is 12% and the average collection period is 72 days. The company follows IFRS. (c) On August 8, 2023, Blossom shipped books invoiced at $26,000,000 (cost $20,800,000 ). Prepare the journal entry to record this transaction, including the expected returns. (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 0 for the amounts. List all debit entries before credit entries.) During 2023, Wildhorse Company started a construction job with a contract price of $1,504,000. The job was completed in 2025 . The following information is available. The contract is non-cancellable. Date Account Titles and Explanation Debit Credit August 8, 2023 (To record sale on account) August 8, 2023 (To record cost of goods sold) Sunland Corp. sells idle machinery to Sheridan Company on July 1,2023 , for $54,000. Sunland agrees to repurchase this equipment from Sheridan on June 30,2024 , for a price of $57,240 (an imputed interest rate of 6% ). (a) Prepare the journal entry for Sunland for the receipt of cash from Sheridan on July 1, 2023. (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 0 for the amounts. List debit entry before credit entry.) Calculate the amount of gross profit to be recognized each year, assuming the percentage-of-completion method is used. (Enter negative amounts using either a negative sign preceding the number e.g. -45 or parentheses e.g. (45).) Allocate the transaction price of $1,056,000 among the performance obligations of the contract. Assume Sheridan follows IFRS. (Round percentage allocations to 2 decimal places, e.g. 12.25% and final answers to 0 decimal places, e.g. 5,275.) Delivery equipment \$ Installation $ eTextbook and Media List of Accounts Li Corp. enters into a contract with a customer to build an apartment building. The customer hopes to rent apartments at the beginning of the school year and offers a performance bonus to be paid if the building is ready for rental beginning August 1,2023 . The bonus is reduced each week that completion is delayed. Nair commonly includes these completion bonuses in its contracts and, based on prior experience, estimates the following completion outcomes: On April 1,2023, Cullumber Inc. entered into a cost plus fixed fee non-cancellable contract to construct an electric generator for Ivanhoe Corporation. At the contract date, Cullumber estimated that it would take two years to complete the project at a cost of $2,480,000. The fixed fee stipulated in the contract was $558,000. Cullumber appropriately accounts for this contract under the percentage-of-completion method. During 2023 , Cullumber incurred costs of $992,000 related to this project. The estimated cost at December 31,2023 , to complete the contract is $1,488,000. Ivanhoe was billed $744,000 under the contract. The billings are nonrefundable. (a) Completed-contract method. On May 31, 2023, Carla Vista Company consigned 120 freezers, costing $500 each, to Wildhorse Company. The cost of shipping the freezers amounted to $660 and was paid by Carla Vista. On December 30,2023 , a report was received from the consignee, indicating that 60 freezers had been sold for $810 each. Remittance was made by the consignee for the amount due after deducting a commission of 8%, advertising of $420, and total installation costs of $490 on the freezers sold. (a) Calculate the inventory value of the units unsold in the hands of the consignee. Inventory value of units unsold $ Pharoah Construction Company began operations on January 1, 2023. During the year, Pharoah entered into a non-cancellable contract with Coronado Corp. to construct a manufacturing facility. At that time, Pharoah estimated that it would take five years to complete the facility at a total cost of $4,501,000. The total contract price for construction of the facility is $6,028,000. During the year, Pharoah incurred $1,084,400 in construction costs related to the project. The estimated cost to complete the contract is $4,337,600. Coronado was billed and paid 25% of the contract price. The billings are non-refundable. Prepare schedules to calculate the amount of gross profit to be recognized for the year ended December 31, 2023, and the amount to be shown as contract assets or liabilities at December 31,2023, under each of the following methods. Prepare a schedule to calculate the amount of gross profit to be recognized by Cullumber under the contract for the year ended December 31, 2023