Question 2.

Indigo Company sells on credits goods that cost $300,500 to Ricard Company for $400,000 on January 2,2020 . The sales price includes an installation fee, which has a standalone selling price of $43,000. The standalone selling price of the goods is $357,000. The installation is considered a separate performance obligation and is expected to take 6 months to complete. (a) Prepare the journal entries (if any) to record the sale on January 2, 2020. (Credit account titles are automatically indented when 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.) (b) Indigo prepares an income statement for the first quarter of 2020, ending on March 31, 2020 (installation was completed on June 18,2020). How much revenue should Indigo recognize related to its sale to Ricard? Flounder, Inc. began work on a $6,499,000 contract in 2020 to construct an office building. Flounder uses the completed-contract method. At December 31, 2020, the balances in certain accounts were Construction in Process \$1,757,000, Accounts Receivable $260,000, and Billings on Construction in Process $1,055,000. Indicate how these accounts would be reported in Flounder's December 31, 2020, balance sheet. (List assets in order of liquidity.) Indigo Company sells on credits goods that cost $300,500 to Ricard Company for $400,000 on January 2,2020 . The sales price includes an installation fee, which has a standalone selling price of $43,000. The standalone selling price of the goods is $357,000. The installation is considered a separate performance obligation and is expected to take 6 months to complete. (a) Prepare the journal entries (if any) to record the sale on January 2, 2020. (Credit account titles are automatically indented when 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.) (b) Indigo prepares an income statement for the first quarter of 2020, ending on March 31, 2020 (installation was completed on June 18,2020). How much revenue should Indigo recognize related to its sale to Ricard? Flounder, Inc. began work on a $6,499,000 contract in 2020 to construct an office building. Flounder uses the completed-contract method. At December 31, 2020, the balances in certain accounts were Construction in Process \$1,757,000, Accounts Receivable $260,000, and Billings on Construction in Process $1,055,000. Indicate how these accounts would be reported in Flounder's December 31, 2020, balance sheet. (List assets in order of liquidity.)