Question 4 of 6 < -18 E Metlock Ranch & Farm is a distributor of ranch and farm equipment. Its products range from small tools, power equipment for french digging and fencing, grain dryers, and barn winches. Most products are sold direct via its company catalog and Internet site. However, given some of its specialty products, select farm implement stores carry Metlock's products. Pricing and cost information on three of Metlock's most popular products are as follows. Item Standalone Selling Price (Cost) Mini-trencher Power fence hole auger 1,100 $3,300 ($2,000) (900) Grain/hay dryer 13,200 (10,000) Respond to the requirements related to the following independent revenue arrangements for Metlock Ranch & Farm (a) On January 1, 2020, Metlock sells 30 augers to Mills Farm & Fleet for $33,000 Mills signs a 6-month note at an annual interest rate of 12% Metlock allows Mills to return any auger that it cannot use within 60 days and receive a full refund. Based on prior experience. Metlock estimates that 5% of units sold to customers like Mills will be returned (using the most likely outcome approach). Metlock's costs to recover the products will be immaterial, and the returned augers are expected to be resold at a profit. Prepare the journal entry for Metlock on January 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) (a) -18 On January 1, 2020, Metlock sells 30 augers to Mills Farm & Fleet for $33,000. Mills signs a 6-month note at an annual interest rate of 12%. Metlock allows Mills to return any auger that it cannot use within 60 days and receive a full refund. Based on prior experience, Metlock estimates that 5% of units sold to customers like Mills will be returned (using the most likely outcome approach). Metlock's costs to recover the products will be immaterial, and the returned augers are expected to be resold at a profit. Prepare the journal entry for Metlock on January 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 (To record sales) (To record cost of goods sold) eTextbook and Media Debit Credit (b) On August 10, 2020, Metlock sells 17 mini-trenchers to a farm co-op in western Minnesota on account. Metlock provides a 4% volume discount on the mini-trenchers if the co-op has a 15% increase in purchases from Metlock compared to the prior year. Given the slowdown in the farm economy, sales to the co-op have been flat, and it is highly unlikely that the benchmark will be met. Prepare the journal entry for Metlock on August 10, 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 (To record sales) (To record cost of goods sold) eTextbook and Media Debit Credit -18 (c) Metlock sells three grain/hay dryers to a local farmer at a total contract price of $42,900. In addition to the dryers, Metlock provides installation, which has a standalone selling price of $1,000 per unit installed. The contract payment also includes a $1,400 maintenance plan for the dryers for 3 years after installation. Metlock signs the contract on June 20, 2020, and receives a 20% down payment from the farmer. The dryers are delivered and installed on October 1, 2020, and full payment is made to Metlock. Prepare the journal entries for Metlock in 2020 related to this arrangement. (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. Round answers to O decimal places, eg. 5,275) Date Jun. 20, 2020 Account Titles and Explanation Debit Credit Question 4 of 6 (To record payment received) (To record sales) (To record cost of goods sold) /8 1 Question 4 of 6 (d) -/8 On April 25, 2020, Metlock ships 100 augers to Farm Depot, a farm supply dealer in Nebraska, on consignment. By June 30, 2020, Farm Depot has sold 60 of the consigned augers at the listed price of $1.100 per unit. Farm Depot notifies Metlock of the sales retains a 10% commission, and remits the cash due Metlock. Prepare the journal entries for Metlock and Farm Depot for the consignment arrangement. (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 Entries for Metlock Account Titles and Explanation Debit Credit Jun. 30, 2020 (To record payment received) Question 4 of 6 < > Entries for Farm Depot (To record payment received) (To record cost of sales) (To record consignment sales) 18 7:37 AM